DOCUMENT OF
THE WORLD BANK
FOR OFFICIAL USE ONLY
REPORT NO. 54742-ZR
DEMOCRATIC REPUBLIC OF CONGO
JOINT IDA-IMF STAFF ADVISORY NOTE
ON THE
PROGRESS REPORT OF THE POVERTY REDUCTION STRATEGY PAPER
(POVERTY REDUCTION AND GROWTH STRATEGY PAPER)
June 11, 2010
Poverty Reduction and Economic Management 3
Country Department AFCC2
Africa Regional Office
This document has a restricted distribution and may be used by recipients only in the performance
of their official duties. Its contents may not otherwise be disclosed without the authorization of the
World Bank and the International Monetary Fund.
ACRONYMS AND ABBREVIATIONS
AIDS Acquired Immune Deficiency Syndrome
ANR Agence Nationale de Renseignement (National Intelligence Service)
CEPGL Economic Community of the Great Lakes Countries
DeMPA Debt Management Performance Assessment
DGDA Direction Générale des Douanes et Accises (Customs)
DRC Democratic Republic of Congo
DSCRP DoCument de Stratégie de Croissance et pour la Réduction de la Pauvreté
ECF Extended Credit Facility
FARDC Force Army of Democratic Republic of Congo
GDP Gross Domestic Product
GECAMINE La Générales des Carrières et des Mines (General of Mine and Carriers)
HIV Human Immunodeficiency Virus
HIPC Heavily Indebted Poor Country
IDA International Development Association
IMF International Monetary Fund
INS National Statistics Institute (Institute National de Statistique)
JSAN Joint Staff Advisory Note
MTEF Medium-term Expenditure Framework
DGDP Direction de Gestion de Dette Publique (Office for Management of Public Debt)
PAP Priority Action Plan
PGAI French language abbreviation of the Platform for Management of Aid and
Investment "Platform de Gestion de l'Aide et des Investissements"
PFM Public Financial Management
PR Progress Report
PNC National Congolese Police
PRGF Poverty Reduction and Growth Facility
PRGS Poverty Reduction and Growth Strategy
REDD UN Program on Reducing Emissions from Deforestation and Forest Degradation
in Developing Countries
SCCA Sino-Congolese Cooperation Agreement
FOR OFFICIAL USE ONLY
Table of Contents
I. Overview ..................................................................................................................................... 1
II. Poverty Diagnostics.................................................................................................................... 2
III. Implementation Progress and Reform Perspectives ................................................................. 3
A. Good Governance and Consolidation of Peace through Strengthened Institutions ............... 3
B. Macroeconomic Performance ................................................................................................ 3
C. Economic Diversification and Private Sector Development.................................................. 5
D. Provision of Social Services and Reduction in Vulnerability ................................................ 7
E. Education ................................................................................................................................ 8
F. Health ..................................................................................................................................... 8
G. Combat HIV/AIDS ................................................................................................................ 9
H. Promote Community Dynamics............................................................................................. 9
IV. Monitoring and Evaluation ..................................................................................................... 10
V. Conclusions and Issues for Discussion .................................................................................... 10
This document has a restricted distribution and may be used by recipients only in the performance of
their official duties. Its contents may not be otherwise disclosed without World Bank authorization.
THE INTERNATIONAL DEVELOPMENT ASSOCIATION AND
THE INTERNATIONAL MONETARY FUND
DEMOCRATIC REPUBLIC OF CONGO
Joint Staff Advisory Note on the
Progress Report of the Poverty Reduction and Growth Strategy Paper
Prepared by the Staffs of the International Development Association and
the International Monetary Fund
Approved by Obiageli K. Ezekwesili (IDA)
and Mark Plant and Christian Mumssen (IMF)
June 11, 2010
I. OVERVIEW
1. This Joint Staff Advisory Note (JSAN) reviews the April 2010 Progress Report
(PR) of the Poverty Reduction and Growth Strategy (PRGS) of the Democratic Republic of
Congo (DRC). The DRC authorities completed their first full PRGS in July 2006 covering the
period 2006-08, which was discussed by the Boards of Executive Directors of the IMF and
World Bank respectively in May and September 2007. The newly elected government confirmed
its commitment to the strategy after taking office in April 2007 and prepared a priority action
plan (PAP) for July 2007-December 2008 to guide the implementation of the PRGS. A
government review of the PRGS over the period April 2007-December 2008 concluded that
implementation needed to be strengthened if its objectives were to be achieved. In particular,
budgetary spending needed to be better aligned with government priorities and the efficiency of
government interventions needed to be enhanced. The authorities therefore decided to extend the
implementation period of the first PRGS to end-2010 in order to assure sufficient time towards
achieving its objectives and to prepare a second generation PRGS, covering the period 2011-15
using a participatory approach.
2. DRC's first full PRGS underpinned the authorities' economic policy during a
particularly challenging transitional period. A new constitution was adopted in 2005 and the
first democratic elections in 40 years took place in 2006. The policies and reforms under the
PRGS have been supported by the international community. However, as noted in the PR,
implementation of these policies was complicated by the absence of a formal IMF program,
2
reflecting the difficulty of implementing macroeconomic policies during a period of instability
and rapidly evolving institutional changes.
3. The PR notes the difficulty of implementing the PRGS in a rapidly evolving
institutional environment. The 2006 Constitution assigns a key role to the provincial authorities
in the delivery of health, education and agricultural services (i.e. fiscal decentralization). Over
the period of analysis, the devolution of services has been uneven across provinces due to
varying degrees of institutional capacity. Resources at the disposal of the provincial authorities
are gradually increasing and amounted to some 2 percent of GDP in 2009, excluding the
provincial civil servants paid directly by the central government. Staffs suggest that in this
context it is increasingly important to focus on strengthening public finance management and the
delivery of priority social services at the provincial level.
4. This JSAN reviews the PR and provides the staffs' advice on implementation
and improvements in the period ahead. Section II reviews available data on the poverty
diagnostic, Section III reports on the authorities' strategy and Section IV on the implementation
of the strategy. Monitoring and evaluation is discussed in Section V. Section VI provides
conclusions and policy recommendations.
II. POVERTY DIAGNOSTICS
5. The PRGS 2006-2010 presents a sound basis for strengthening and diversifying
the economy and reducing poverty. The strategy derives much of its strength from its broad-
based participatory preparation process, which involved a series of consultations with
stakeholders in different provinces of the country. Surveys were undertaken countrywide and
extensive grassroots consultations were held in order to reflect the reality on the ground and the
views of stakeholders in the design and implementation of the strategy.
6. Despite efforts to strengthen the capacity of the National Statistical Institute
(Institute National de Statistique, INS), monitoring poverty remains a challenge. Statistical
information on the causality and distribution of poverty is based on the most recent poverty
assessment published in 2006, which drew on the 1-2-3 survey completed in 2005. It shows that
over 71 percent of Congolese households live below the poverty line. Given the evolution of the
development situation since the launch of the PRGS and PAP in 2006 and 2007, staffs encourage
the Government to update and strengthen poverty monitoring by conducting a new household
survey. This should be supported by an increased effort to analyze the data that have been
collected in smaller surveys. Staffs note that beyond the current focus on economic growth, the
next-generation PRS could explicitly recognize government strategies to reduce vulnerability and
ensure inclusive growth.
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III. IMPLEMENTATION PROGRESS AND REFORM PERSPECTIVES
A. Good Governance and Consolidation of Peace through Strengthened Institutions
7. The DRC government has undertaken structural and administrative reforms
to improve governance and implement the decentralization agenda outlined in the 2006
Constitution. Progress on decentralization includes the adoption of a law on the administration
of the provinces (Loi sur la Libre Administration des Provinces) and increased involvement of
provincial authorities in the central government's decision making processes. Although the roles
of the central and provincial governments have been clearly defined, implementation has been
slow in the context of weak provincial institutions. Staffs welcome the Government's efforts to
undertake a census of civil servants, enforce mandatory retirement, implement payroll system
reform and review the legal framework of the public administration.
8. The PRGS identifies security sector reforms as a fundamental priority for
consolidating peace and development. These reforms in the military, police and justice sectors
are particularly relevant in addressing the conflict in the eastern provinces. The staffs note some
progress such as the establishment of two committees for police and justice reform (Comité du
Suivi de la Réforme de la Police, established in 2007 and Comité Mixte de la Justice, established
in 2004). First steps toward better human resource management in the national army included the
carrying out a successful biometric census that identified and eliminated `ghost workers' and
then allowed an increase in salaries. Given the unstable situation, security sector reforms need to
continue, including addressing gender-based violence. To this end, staffs encourage the
authorities to promptly adopt the organic and general status laws for both police and military that
have been under consideration by Parliament since 2007 and 2009 and that are aimed at
improving the human right situation.
9. Despite the authorities' efforts to date, poor accountability and transparency
remain fundamental problems. Staffs note that a perceived or real lack of public accountability
undermines support for the government's actions. Government is seen as detached in many parts
of the country, and the security services are often mistrusted. Staffs urge the authorities to further
enhance the use of social accountability mechanisms in public service delivery so as to give
greater voice to recipients and improve the quality of services. The 2010 user survey provides
useful information to formulate future actions in this area.
B. Macroeconomic Performance
10. Macroeconomic management improved significantly under very difficult
circumstances. As the PR highlights, the global financial crisis and conflict in the eastern
provinces weakened macroeconomic performance and complicated the implementation of
macroeconomic policies. Steep declines in export prices and the slowdown in external demand
due to the global financial crisis curbed economic growth from 6.2 percent in 2008 to 2.8 percent
in 2009. Meanwhile, inflation, which averaged 14.5 percent in 2003-08, rose to over 100 percent
in April 2009 (on annualized basis) following a sharp depreciation of the franc against U.S.
4
dollar in response to the sharp drop in export receipts and an uptick in central bank credit
provided to the government in late 2008 to finance security related spending. Inflation has
subsequently declined to 15 percent at end April 2010, reflecting prudent monetary and fiscal
policies. Official reserves rose to the equivalent of seven weeks of imports by end-2009, up from
one week at end 2008, buoyed by official balance of payments support, most notably the general
and special SDR allocations.
11. Macroeconomic policy implementation was broadly satisfactory. Progress made
on fiscal reforms bolstered the resilience of revenue in the wake of the global financial crisis.
Central government revenue increased from 7.7 percent of GDP in 2003 to about 16 percent in
2009. Efforts made to contain spending--notably through improved management of
commitments and enhanced monitoring--also helped limit the impact of the marked slowdown
in economic activity on the fiscal deficit. Although the implementation of monetary policy was
complicated by difficulties in liquidity forecasting during 2009, these weaknesses have been
subsequently addressed. This, together with increases in the central bank policy rate and the
mopping up of excess liquidity, helped to contain excessive monetary growth. Policy
implementation during the first half of 2010 was broadly satisfactory and program objectives and
targets for end-June are likely to be achieved.
12. Staffs consider the medium-term macroeconomic framework outlined in the
PR, which is consistent with that of the ECF-supported program, appropriate, but
emphasize that consistent implementation of prudent macroeconomic policies are needed in
order to enhance macroeconomic stability. The over-riding objective of fiscal policy is to
avoid the recourse to borrowing from the central bank. This is to be supported by measures to
mobilize fiscal revenues-- notably through ambitious reforms in tax and customs
administration--along with prudent expenditure management. Additional reforms are needed to
further improve fiscal discipline. In particular, a key objective is to strengthen the budget
planning and execution process, by ensuring consistency between budget plans, spending
commitments, and payments. Expediting ongoing reforms to recapitalize the central bank and
enhance its independence will be critical for improving the overall effectiveness of monetary
policy.
13. The DRC made significant progress in strengthening public finance, but more
actions are needed. The authorities established and strengthened the Large Taxpayers Unit at
the income tax department, through computerization and improved collection procedures.
Revenues could be further strengthened by rationalizing nuisance taxes, and strengthening
revenue collection from the mining sector. On customs administration, a one-stop window was
established at two key border posts and import valuation was strengthened. Unfortunately, the
impact of these measures was tempered by continued parallel processing of paperwork. Staffs
encourage the authorities to improve trade facilitation to reduce both the transit period at border
and the cost involved. On PFM, the government established transparent procedures for payments
of urgent spending requests and advanced the modernization of the legal and regulatory
framework of the PFM system. They also designed and adopted a medium term PFM reform
5
strategy plan. Recently, the authorities adopted a modern procurement law and began to establish
the relevant institutions. Staffs note that further efforts will be needed to improve the consistency
between the commitment, treasury, and foreign exchange budget plans and to effectively
implement decentralization. More generally, a medium-term expenditure framework in
combination with regular budget execution reports could help empower line ministries.
14. Although not covered in the PR, reforms in the financial sector are advancing
albeit at a slow pace. On central bank reforms, the central bank (BCC) was restructured and
reorganized as the first step toward recapitalization and financial independence. Banking
supervision is also being reinforced, as is the central bank's capacity to conduct monetary policy.
Nevertheless, several weaknesses in terms of supervisory practice need to be addressed,
including: (i) regulation on the classification and provisioning of non-performing loans; (ii) off-
site supervision in terms of introducing and implementing early warning system models; and (iii)
on-site examination, in particular with regard to an in-depth analysis of loan files. Staffs
encourage the authorities to strengthen the central bank's banking supervision capacity in order
to allow it to respond in a timely manner to deal with financial sector stability issues in close
coordination with the Ministry of Finance.
15. Debt sustainability will require adherence to prudent debt management
policies. In this regard, Congolese authorities carefully managed the negotiation of a Sino-
Congolese Cooperation agreement (SCCA) that was amended to ensure long-term debt
sustainability after debt relief. Given the important opportunity provided by the exchange of
natural resources for infrastructure investment and the need for the DRC to reap the full benefit
of such an exchange, there is a need for strengthening government planning in selecting
investments with high growth impact and ensuring long-term funding for maintenance out of the
recurrent budget.
16. Debt management has improved substantially, particularly with respect to
recording and reporting of debt data. The government has taken measures to centralize all
debt data in a single center, under the purview of its debt management agency (DGDP). The
agency has activated a computerized debt-recording system, which is capable of recording loan
disbursements and service payments made, as well as generating monthly debt service
projections. While there has been substantial progress, further measures are needed to strengthen
debt management practices including: (i) building technical capacity and acquiring the
equipment required to address the significant operational risk that may affect DRC capacity to
meet its obligations on a timely basis; (ii) ensuring the maintenance of a debt database that is
accurate and up to date by improving processes and inter-agency coordination of debt data flows;
and (iii) the approval of an official debt management manual.
C. Economic Diversification and Private Sector Development
17. The PR assesses the progress towards alleviating the key constraints to growth in the
priority sectors. Staffs welcome the authorities' emphasis on a better business climate, including
6
by joining OHADA, and their efforts to improve the DRC's ranking on the "Doing Business"
indicators. To be far-reaching, these reforms would also need to involve the reform of state-
owned enterprises and agencies, including addressing the entities' large social liabilities, such as
wage arrears and payment of indemnities upon retirement. The implementation of these reforms
is critical for alleviating growth bottlenecks.
18. The PR identifies the key obstacles to agricultural growth--infrastructure, inputs,
technology, and access to capital. Staffs agree with this diagnosis and commend the authorities'
recent progress in expanding infrastructure, notably integrated transport networks. In this regard,
it is particularly welcome that the authorities were able to construct/rehabilitate almost twice the
length of rural roads as planned (PR: Table 1: page 35). To facilitate moving up the agricultural
value chain, market failures in rural finance need to be addressed, especially with regard to
access to capital. The authorities should also consider facilitating trade by allowing cross-border
supply of key inputs and services and improving access to markets.
19. Staffs welcome the Government's adoption of an agriculture sector strategy
since it is a key sector for growth and poverty alleviation. This new strategy provides a clear
vision, namely by (i) improving marketing efficiency; (ii) enhancing productivity of traditional,
smallholder-based agriculture; (iii) re-capitalizing agricultural and livestock production sector
through farm investments; and (iv) providing decentralized and de-concentrated support services
to a broad range of community-led initiatives. Despite enormous potential, the agricultural
sector's contribution to GDP declined dramatically between 1990 and 2001 and, as a result, the
sector is in drastic need of additional resources and investment as outlined in the strategy.
20. Closer coordination between the different ministries involved in rural
development, and the central and decentralized levels would improve the effectiveness of
government interventions for growth and poverty reduction in rural areas. Staffs
encourage the authorities to work on a harmonized strategy for agriculture and rural development
at the lower levels of the public administration, in addition to the ministerial level strategies for
agriculture and rural development. This strategy would provide a strong basis for improved
donor coordination. Furthermore, to allow for better targeting of priorities and better orientation
of public services to poor communities, the decentralization of decision making processes needs
to be pursued, including budget execution in the agriculture and rural development sector.
21. Staffs agree with the role for forests and forest products in economic growth,
but encourage the authorities to improve the appropriation and fair division of fiscal
revenues from these activities with provinces and territories, as mandated by law. The
policy and legal framework for sustainable forest management improved significantly over the
period under review. The rights of local communities and indigenous people living in or close to
the forest concessions were also strengthened. Staffs advise that it is important that the rural
poor benefit from improved forest management, such as through tax receipts from forest
concessions and the establishment of social infrastructure (schools, health care, and farm-to-
market roads) by concessionaires. Staffs appreciate the progress in tax reporting by forest
companies, but emphasize the need for better control of illegal exports of "informal" sawnwood.
DRC is at the forefront of climate change mitigation and has a formally approved "Readiness
7
Plan" for Reducing Emissions from Deforestation and Forest Degradation in Developing
Countries "REDD". An implementation program is expected to be endorsed by the next
Conference of the Parties to the UN Framework Convention on Climate Change.
22. Staffs agree with the PR's assessment that governance in the mining sector is
crucial to attract foreign investors, but are concerned about the application of this
principle. The PR reference to the government's commitment to obtain validation in the
Extractive Industry Transparency Initiative (EITI) and its efforts to develop a strategy using the
EITI++ framework to improve the management of the sector is welcome. More broadly, staffs
note that DRC is severely constrained in attracting investors due to poor governance. To broaden
the pool of investors beyond those willing to take high risks against high returns, government
would need to strengthen governance and ensure contract stability in this sector. .
23. The PR is optimistic about the role for industrial development in economic
growth and poverty alleviation. Staffs agree that such development would over time contribute
to growth and employment. However, in the immediate future other sectors, such as agriculture,
mining, construction and trade, are more likely to make a significant contribution to growth.
24. The PR stresses the potential benefit of electricity, transport, telecom and
other infrastructure sectors for economic growth and poverty alleviation. The lack of
infrastructure is a major constraint to growth and the key principles identified in the PR for
strengthening economic growth in this sector are reasonable. However, severe institutional and
governance capacity constraints complicate the application of these principles. The report
correctly notes the need for significant investments in this sector, but could also have mentioned
the need for greater focus on maintenance to avoid neutralizing the positive impact of
investment. The macroeconomic analysis above underscored the lack of government resources
for such investment, and hence the need to attract private capital. The authorities may want to
explore more actively alternative institutional arrangements, including public private
partnerships, that will allow the private sector the security to contribute to building and
maintaining the required infrastructure.
D. Provision of Social Services and Reduction in Vulnerability
25. The PR highlights progress in the delivery of social services, giving due credit
to the role of development partners. The coordination with development partners has improved
following the adoption of the Kinshasa Agenda with an improvement in the thematic groups used
to organize dialogue and policy harmonization in various sectors. Staffs note that the authorities
may want to make active use of the medium-term expenditure framework that was developed in
close cooperation with the Ministries of Health, Education and Agriculture to further improve the
effectiveness of the various sources of financing (budget, households and development partners).
More broadly, staffs would like to encourage the government to take greater leadership in the
implementation of the Kinshasa Agenda, with greater involvement of the line ministries.
8
26. The PR notes the persistence of wide disparities in the quality of service
delivery between provinces. This is an issue which may be accentuated by decentralization of
government services which is moving ahead in health, education and agricultural services. Staffs
recommend that this issue should be addressed explicitly in the second generation PRGS.
E. Education
27. The PR rightly notes the successful increase in access to basic education. While
data issues prevent a precise assessment, various factors indicate that schooling opportunities for
Congolese youth increased during recent years. Data suggest that total enrollment (primary-
higher education) increased from 12 million in 2006/07 to 13 million in 2007/08. This increase is
corroborated by field visits. Medium-term expenditure estimates for 2006-09 show an increase in
public resources for education and important financial contributions by local communities and
parents. The rising demand for education led to the establishment of schools by communities
(under sponsorship of religious organizations) and the recruitment of community teachers, about
40,000 of which the government agreed to migrate to the civil service payroll to reduce the
burden on communities. Staffs support this policy in principle but encourage the authorities to
implement it in a transparent manner based on a civil service survey and objective criteria.
28. The PR refers to the critical inputs that have been provided to students and
are expected to improve their learning experience. More than 21 million textbooks
(mathematics and French) and teaching guides were distributed to all primary schools (public
and private). Similarly, greater attention was paid to the provision of in-service training and
teacher supervision activities, although these remained broadly insufficient and of low quality.
While results of a recent beneficiary survey carried out by the Government showed that the
majority of people expressed generally a positive view on the education quality, student
achievement assessments underscored that acquired competencies were relatively low and that
the pertinence of qualification remained an issue.
29. The PR could have discussed in more detail the expansion of primary and
secondary education. The Government has made strong efforts to progressively develop an
integrated strategy for these activities, aiming to ensure a balanced and sustainable expansion of
the sector in the long run. As a first step, a basic Education Strategy, along with the priority
action plan, was adopted by the Government in March 2010. This strategy focuses on three
objectives: (i) improving access and retention in basic education; (ii) improving the quality and
the pertinence of basic education; and (iii) strengthening the management and governance of the
system. Staffs endorse the objectives of this strategy but - in view of the limited financial
resources and the organizational and logistical challenges - caution against a hasty
implementation of a free primary school policy.
F. Health
30. The PR surveys the significant progress that has been made with regard to
some key health indicators such as infant and under-five mortality. Maternal mortality is
difficult to assess, but the trends suggest improvements in maternal health. This progress may be
9
attributed to significant gains in coverage with long-lasting impregnated bed nets, better
performance of the national immunization program and improvements in access to essential
drugs in public facilities.
31. The PR highlights that access to medical supplies and qualified medical
personnel remains problematic. Provincial and district staffs with managerial responsibilities
are now better equipped to steer the provision of health services, and tools to assist with
decentralized planning have been developed and disseminated. However, vaccination coverage
remains incomplete and is sometimes affected by recurrent shortages. Significant progress has
been achieved with regard to the procurement and distribution of pharmaceuticals, although the
sector remains very fragmented. The number of health staffs has steadily increased, but remains
poorly distributed and imbalances persist between Kinshasa and other urban centers and the rest
of the country. Staffs welcome that the authorities aim to address these challenges through the
implementation of a revised national health strategy that could build on the positive experience
with the mass distribution of bed nets in Kinshasa and other provinces.
32. The authorities have revised their national health strategy based on analytical
work and a consultative process. The consultative process involved representatives of civil
society, donors as well as provincial, districts and health zones staff. Staffs welcome the new
strategy but note that important questions remain about the management of the health work
force, the needs to continue building up capacities at the peripheral level, and the lack of
investments in primary care facilities. Staffs also note that the financing of the sector is strongly
regressive and largely funded by household out of pocket expenditures and donor support.
G. Combat HIV/AIDS
33. The PR reports that the implementation of the national strategy on HIV/AIDS
is making real, but slow, progress. Blood transfusion is gradually becoming safer and there has
been significant progress with regard to dissemination of messages and community mobilization.
However, capacity on the ground to expand voluntary testing and counseling remains limited and
less than 10 percent of eligible patients receive anti-retroviral drugs. Staffs welcome the ongoing
efforts to build up the required capacity to provide HIV services at the community level. This
requires extensive staff training, development of functioning supply chains for ARVs, and
provision of adequate laboratory services.
H. Promote Community Dynamics
34. The scarce mention of promotion of Community Dynamics in the PR
demonstrates the limited progress in this area. Community dynamics must be taken into
account as a cross-cutting issue in the development of the full spectrum of activities. Staffs
encourage the DRC authorities to promote local and community driven activities and develop
tools to engage communities in their development endeavors. Staffs welcome the DRC
government's initiative to set up a committee for civil society capacity building, and
congratulates the government on the organization of national and provincial consultations over
2008-2009. Staffs recommend further efforts to strengthen the empowerment of civil society,
10
particularly in governance, economic activities (such as agriculture) and in social sectors
(particularly health, HIV/AIDS and education).
IV. MONITORING AND EVALUATION
35. The PR highlights the continued lack of data to assess the impact of economic
policies. Staffs concur that it is a challenge to obtain accurate information on economic
developments, in general, and poverty indicators in particular. In the absence of a framework for
data sharing among agencies, ministries and donors, publication and effective dissemination of
information remains elusive. Given the apparent weakness in the statistical foundation for policy
analysis, the staffs encourage the authorities and donors to request the INS to coordinate the
formulation and implementation of a data collection and dissemination strategy to underpin the
monitoring and evaluation of the PRGS.
36. Implementation and monitoring mechanisms for the PRGS exist, but need to
be reviewed and interventions should be budgeted as advised in the 2007 JSAN. Staffs
welcome the rationalization of the thematic groups and sub-groups from 45 to 19 but note that
the authorities could further reduce the heaviness of the mechanisms themselves and clarify tasks
and responsibilities. Staffs encourage the Government to push for a more pro-active role of
sector ministries in monitoring pro-poor spending. Also, despite the existence of inter-ministerial
monitoring mechanisms such as UPPE and CTR, staffs note the general lack of a structured
evaluation system within the Government, which hampered an appropriate evaluation of PAP
2008. Staffs recommend that the Government, and in particular the Ministry of Planning,
reinforce evaluation capacities and budgeting of poverty alleviation initiatives.
V. CONCLUSIONS AND ISSUES FOR DISCUSSION
37. Developments during recent years, and in particular the last year, demonstrate
the DRC's capacity for growth and poverty alleviation if the right incentives are provided.
Such incentives involve security and a manageable business environment that allows investors to
enjoy the fruits of their investments. This applies not only to physical investment in all sectors
but also to investment in human capital. The DRC population at every income level has
demonstrated their willingness to make large financial sacrifices to ensure that their needs for
health and education are addressed. This capacity to take a long-term view on investment
provides confidence that the DRC will move towards sustainable growth with poverty alleviation
once security and governance issues are adequately addressed.
38. Developments during the last year also indicate the authorities' commitment to
address the key issues, even in the face of significant political challenges. The establishment
of peace with Rwanda provides the prospect for reinvigorated regional integration in the Great
Lakes Region as an engine for growth for all partners. The renegotiation of the SCCA is another
example where the DRC authorities took a difficult decision that will contribute to moving
towards a sustainable external debt situation. Staffs note that cooperation with all international
partners will help the authorities mobilize the massive development financing needs. Such
11
cooperation may also help to spread the benefits of natural resources across the country and
address the spatial distribution of poverty and exclusion:
39. The authorities' response to short-term concerns builds on a compelling vision
of long-term development. The authorities remain committed to a long-term vision of
decentralization of public services, especially in education, health and agriculture, as
demonstrated by the recent efforts taken towards the use a medium-term expenditure framework
(MTEF) for the preparation of the next generation PRGS. Staffs note the impressive progress
realized since the 2002 peace agreements and applaud the authorities' continued commitment to
economic reforms, democratic elections, decentralization and vigorous implementation of the
Kinshasa Agenda that sets the stage for continued coordination with all donors. Going forward
the authorities will have to (i) find the right pace to pursue the decentralization agenda, (ii)
selectively engage in structural reforms to boost economic development, including modernizing
public administration, restoring competitiveness of essential utility and transport services,
improving the business environment and (iii) implement an incremental infrastructure plan in
order to get out the vicious circle of conflict and enter into a virtuous cycle of development with
a view of moving toward inclusive growth. This vision is not without risk, but it offers the best
hope to address over time the underlying grievances of the conflict that has allowed a lack of
security ­ in particular for women ­ to foster.
40. In considering the PR, staffs would like to consult Executive Directors' views
on whether they agree with this JSAN, in particular as regards: (i) their views of PRGS
implementation during the past 12-months July 2009 - June 2010, and (ii) suggestions on priority
measures for further refining the PRGS and strengthening its implementation.
Democratic Republic of the Congo
Inter-Ministerial Commission on Implementation of the National Poverty Reduction Strategy
CI-SNLCP
REPORT ON IMPLEMENTATION OF THE GROWTH
AND POVERTY REDUCTION STRATEGY
April 2010
TABLE OF CONTENTS
TABLE OF CONTENTS ..............................................................................................................................................................2
ACRONYMS 3
EXECUTIVE SUMMARY ...........................................................................................................................................................6
CONTEXT SURROUNDING THE PREPARATION AND IMPLEMENTATION OF THE FINAL GPRSP ............................. 13
REPORT METHODOLOGY.................................................................................................................................. 14
FRAMEWORK .................................................................................................................................................. 14
CHAPTER 1. ANALYSIS OF MACROECONOMIC PERFORMANCE AND EXPENDITURE........................ 16
INTRODUCTION ............................................................................................................................................... 16
1.1. RECENT DEVELOPMENTS IN THE CONGOLESE ECONOMY ........................................................................... 16
1.1.1. Economic activity and prices .................................................................................................... 16
1.1.2. Public sector ............................................................................................................................. 16
1.1.3. External sector .......................................................................................................................... 17
1.1.4. Monetary sector ........................................................................................................................ 17
1.1.5. Economic situation at end-March 2010..................................................................................... 17
1.2. EXPENDITURE ANALYSIS .................................................................................................................... 20
1.2.1. Analysis of budget expenditure by category .............................................................................. 20
1.2.2. Public expenditure in relation to GPRSP priorities ................................................................... 21
1.3. MEDIUM-TERM MACROECONOMIC PROSPECTS .................................................................................... 25
CHAPTER 2. ACTIONS IMPLEMENTED ................................................................................................................. 26
INTRODUCTION ............................................................................................................................................... 26
2.1. PROMOTING GOOD GOVERNANCE AND CONSOLIDATING PEACE THROUGH STRENGTHENED INSTITUTIONS
26
2.1.1. Security and judicial governance .............................................................................................. 26
2.1.2. Political and administrative governance ................................................................................... 28
2.1.3. Economic governance ............................................................................................................... 29
2.2. POLICIES SUPPORTING ECONOMIC GROWTH ........................................................................................ 32
2.2.1. Agriculture and rural development ........................................................................................... 32
2.2.2. Forest and the environment....................................................................................................... 33
2.2.3. Mines and hydrocarbons ........................................................................................................... 34
2.2.4. Energy ...................................................................................................................................... 35
2.2.5. Transportation infrastructure ................................................................................................... 36
2.2.6. Industry..................................................................................................................................... 37
2.2.7. Trade ........................................................................................................................................ 37
2.3. IMPROVED ACCESS TO BASIC SOCIAL SERVICES AND REDUCED VULNERABILITY .................................. 38
2.3.1. Education.................................................................................................................................. 38
2.3.2. Health ....................................................................................................................................... 38
2.3.3. Water and sanitation ................................................................................................................. 39
2.3.4. Social protection ....................................................................................................................... 40
2.4. THE FIGHT AGAINST HIV/AIDS (ONE OF THE GPRS PILLARS) ............................................................ 40
2.4.1. Preventing and stabilizing HIV and STI transmission ............................................................... 40
2.4.2. Speeding treatment and improving the quality of life of persons living with HIV/AIDS ............. 42
2.4.3. Mitigating the socioeconomic impact of HIV/AIDS on the community ...................................... 42
2.4.4. Building coordination, monitoring and evaluation capacities at all levels ................................ 42
2.5. SUPPORT FOR LOCAL INITIATIVES ....................................................................................................... 42
2.6. STRENGTHENING CAPACITIES ............................................................................................................. 43
CHAPTER 3. MONITORING AND EVALUATION .................................................................................................. 43
3.1. INSTITUTIONAL FRAMEWORK ............................................................................................................. 43
3.2. MONITORING AND EVALUATION TOOLS .............................................................................................. 43
CONCLUSION 45
CLOSING REMARKS ......................................................................................................................................... 45
ANNEXES 48
2
ACRONYMS
AGT Large-Scale Works Agency
ASNIC Intermediate and Central Health System Support
ASNIP Intermediate and Peripheral Health System Support
BCC Central Bank of the Congo
CAMI Mining rights administrator Cadastre minier
CDF Congolese francs
CEEC Expertise, Evaluation and Certification Center
CI-SNLCP Inter-Ministerial Commission on Implementation of the National Poverty
Reduction Strategy
CISPI Inter-Ministerial Monitoring Commission for Financial Institution Programs
CNDP National Congress for Defense of the People
CNMLS National Multi-Sector Commission to Combat AIDS
COREF Steering Committee on Public Finance Reform
CPCM Standing Macroeconomic Framework Committee
CSMOD Strategic Decentralization Implementation Framework
CSRP Police Reform Monitoring Committee
CTB Belgian Technical Cooperation
CTR CISPI Technical Monitoring Committee
DEVINFO Human development database
DGDA Customs and Excise Directorate
DGDP Directorate of Public Debt
DGE DGDA Large Enterprises Department
DGI Tax administration
DGRAD Directorate of Administrative and State Revenues
DPSB Directorate of Planning and Budget Monitoring
DPSI Industrial Policy and Strategy Document
DRC Democratic Republic of the Congo
DTO Treasury Management and Payment Authorization Office
DVDA Agricultural Feeder Roads Department
EDS Demographic and health survey
ESB Budget monitoring reports
FAO United Nations Food and Agriculture Organization
FINEXPO Belgian Export Financing
FONER National Highway Maintenance Fund
FSRDC Social Fund of the Democratic Republic of the Congo
GAVI Global Alliance for Vaccines and Immunization
GECAMINES State-owned mining company Générale de Carrières et des Mines
GMRRR Joint Discussion Group on Reform and Reorganization of the Congolese
National Police
GPRS Growth and poverty reduction strategy
GPRSP Growth and Poverty Reduction Strategy Paper
GTZ German Agency for Technical Cooperation
HIPC Heavily Indebted Poor Countries Initiative
ICCN Congolese Nature Conservation Institute
IGT Office of the Labor Inspector
INERA National Institute for Agronomy Research
INS National Institute of Statistics
OI Opportunistic Infection
EITI Extractive Industries Transparency Initiative
JICA Japan International Cooperation Agency
MDG Millennium Development Goals
MDRI Multilateral Debt Reduction Initiative
MDRI Multilateral Debt Reduction Initiative
3
MICS Multiple Indicator Cluster Survey
MONUC United Nations Mission to the Congo
NGO Nongovernmental organization
NSS National Statistics System
OCC Ministry of Trade Inspection Office
OCPI Congolese Poverty and Inequality Observatory
ODR Highway Authority
OFIDA Customs and Excise Office [DGDA predecessor]
OGEDEP Public Debt Management Office [DGDP predecessor]
OHADA Organization for the Harmonization of Business Law in Africa
OKIMO Kilo Moto Gold Mining Office
ONATRA National Transportation Office
ONEM National Employment Office
OVC Orphans and vulnerable children)
OVD Road Network and Drainage Authority
PAIDECO Program in Support of Community Development Initiatives
PAP Priority Action Plan
PARSAR Agricultural and Rural Sector Rehabilitation Support Project in Bandundu and
Bas-Congo Provinces
PARSS World Bank Health Sector Reform Project
PASU Emergency Social Action Project
PEASU Peri-Urban Water Supply and Sanitation Project
PEMU World Bank Urban Potable Water Supply Project
PFCN World Bank Forest and Nature Conservation Project
PGAI Aid and Investment Management Platform
PIEGMA Better Job Market Management through Effective Data Processing
PMEDE Domestic Electricity Markets for Consumption and Export Project
PMUEIAA Multi-Sector Socioeconomic Rehabilitation Project
PMURIS Emergency Multi-Sector Socioeconomic Infrastructure Rehabilitation Project
PMURR Emergency Multi-Sector Infrastructure Rehabilitation and Reconstruction
Program
PNC Congolese National Police
PNDS National Health Development Program
PNFOCO National Forest and Nature Conservation Project
PNMLS National Multi-Sector Program against HIV/AID
PRAPE Equateur Province Agricultural Recovery Program
PRAPO Orientale Province Agricultural Recovery Program
PRESAR Agriculture and Rural Sector Rehabilitation Project in Ktanga, West Kasai and
East Kasai Provinces
PRGF Growth and Poverty Reduction Facility
PRODAP Lake Tanganyika Integrated Regional Development Program
PROMINES Mining promotion project
PRONAREC National Capacity Strengthening Program
PRSP-I Interim Poverty Reduction Strategy Paper
PS9FED Ninth European Development Fund Health Program
PSRFP Strategic Plan for Public Finance Reform
PURUS Emergency Urban and Social Infrastructure Rehabilitation Project
RAAAP Rapid Country Assessment, Analysis, and Action Planning Initiative on Behalf
of Orphans and other Vulnerable Children in Sub-Sahara Africa
REGIDESO Water Distribution Authority
RVA National Aviation Administration
SAESSCAM Small Scale Mining Support Department
SAPMP Southern Africa Power Market Project
SENAREC National Capacity Strengthening Secretariat
SENASEM National Seed Service
4
SIE Energy Information System
SNCC Congolese National Railroad Company
SRSS Health System Strengthening Strategy
STI Sexually transmitted infections
TFP Technical and financial partners
UNAIDS United Nations Programme on HIV/AIDS
UNDP United Nations Development Program
UNGASS United Nations General Assembly Special Session on HIV/AIDS
UNICEF United Nations Children's Fund
UPPE-SRP CI-SNLCP National Poverty Reduction Strategy Coordinating Unit
USAID United States Agency for International Development
WHO World Health Organization
5
EXECUTIVE SUMMARY
The Government of the Democratic Republic of the Congo (DRC) issues its report on the
implementation of its Poverty Reduction and Growth Strategy Paper (GPRSP) for 2009, in the
context of achieving completion point triggers under the enhanced initiative for Heavily
Indebted Poor Countries (HIPC). The DRC aims to qualify for substantial external debt
cancellation under both the HIPC Initiative and the Multilateral Debt Reduction Initiative
(MDRI).
The GPRSP was prepared in two phases. In the first phase, an interim poverty reduction
strategy paper (PRSP-I) was put in place for practical reasons relating notably to limitations
of the statistical apparatus and weakened human and institutional capacities in formulating
development policies, the delayed consequence of years of political, economic, and social
instability. Through the successes of one year's implementation of the PRSP-I and six
months' execution of the program supported by the Poverty Reduction and Growth Facility
(PRGF), a key component of the PRSP-I, the DRC reached the decision point under the
enhanced HIPC Initiative in July 2003 and was granted debt relief representing approximately
90% of the State's debt service, which was used to finance spending to combat poverty.
In the second phase, a final version of the poverty reduction strategy (which had since become
the Growth and Poverty Reduction Strategy Paper, GPRSP) was developed through a
participatory approach. The final version of the first-generation GPRSP was first adopted by
the transition government in July 2006, and subsequently endorsed by the government elected
through free and democratic elections in March 2007. It was approved by the World Bank
Board of Directors and the IMF Executive Board in March and April, 2007, respectively.
Following practical difficulties, the action plan for implementation of the first-generation
GPRSP was finalized in July 2007.
It is important to recall that the implementation of the GPRSP beginning in July 2007 took
place in an extremely challenging environment, marked by (i) the devastation of economic
and social infrastructures, a formidable obstacle to private sector growth and development; (ii)
uncertainties surrounding the preparation and staging of the first truly free and democratic
elections in a climate of heightened tensions; (iii) renewed hostilities in the eastern region,
bringing grave humanitarian consequences; (iv) the global food and energy crises; (v) the
international financial crisis (the most serious since the Great Depression of 1929); (vi) the
collapse in commodity prices and resultant contraction of government revenue; (vii) the lack
of budgetary support since the 2006 suspension of the PRGF program; and (viii) weak human
and institutional capacities, particularly in the areas of statistics, policy formulation, and the
monitoring and evaluation of policy implementation.
The combination of these factors adversely affected the conduct of macroeconomic and sector
policies.
Macroeconomic policies were implemented under the program supported by the Extended
Credit Facility that took effect in July 2009 and was formally concluded in December 2009.
The overall results were satisfactory. The economy grew by 2.8 percent, compared to a target
of 2.7 percent, sparked by a third-quarter recovery in the mining sector and the attendant
spillover effects in the tertiary sector. Inflation climbed to 53.4 percent, corresponding to an
annual average of 46.1 percent, compared to a target of 48.7 percent. The indicative U.S.
6
dollar­Congolese franc exchange rate was 902.7, representing a 29.2 percent depreciation
compared to the same period of 2008.
This macroeconomic performance was the result of rigorous budgetary and monetary policies
adopted in 2009 and pursued through third quarter 2010. Inflation declined from around 47.6
percent in February 2010 to 34.3 percent in March. In annualized terms, it stood at 19.6
percent in March compared to 50.9 percent in February and an annual target of 15 percent.
Viewed in terms of GPRSP pillars, public expenditure management demonstrates the
importance of the strategic pillar "Promoting good governance and peace." Spending for this
pillar accounted for roughly 60 percent of primary expenditure in 2009, followed by pillar 3,
"Promoting access to basic social services," which declined slightly as a proportion of
primary expenditure from 24.9 percent in 2008 to 23.6 percent in 2009. Pillar 2, "Support
sectors with growth potential," increased from 16.2 percent in 2008 to 16.5 percent in 2009.
The government recognizes that continued, sustainable growth in a stable macroeconomic
climate is essential to reducing poverty. The medium-term macroeconomic objectives remain
the same as agreed in the recent PRGF arrangement. Stated in quantitative terms, the
objectives are: (i) reduce year-to-year inflation to 9 percent by end-2012; (ii) increase
international reserves to 10 weeks of nonaid imports by end-2012; and (iii) achieve real GDP
growth in the range of 6 percent per annum. The government intends to accelerate its program
of reforms to achieve these objectives.
The accomplishments in regard to sector policies are highly encouraging. With respect to
security, operations successfully reestablished peace and the government's authority in the
eastern and western parts of the country (the Goma peace accord, the Amani Programme for
the Security, Pacification, Stabilization and Reconstruction of the Kivu Provinces, the joint
Umoja Wetu operation with Rwanda, Kimia I and II, Operation Amani Leo, and the
assimilation (brassage), disarmament, demobilization, and integration of ex-combatants).
There was notable progress in the administration of justice, including review of the Ministry
of Justice organizational framework, the new Constitutional Court act awaiting adoption by
the Parliament, the construction of a new Palais de Justice, and rehabilitation of courthouses,
prosecutors' offices and prisons in Kinshasa and the provinces.
Police reform efforts continued in the context of the Joint Discussion Group on Reform and
Reorganization of the Congolese National Police (GMRRR), yielding the following
preliminary results to date: (i) a preliminary draft framework law, which has been submitted
to the Parliament; (ii) establishment of the Police Reform Monitoring Committee (CSRP);
(iii) construction and equipping of an office building for the finance, budget, data processing,
and human resources departments; and (iv) collection of data on police force staffing.
There were no significant developments in reform of the public administration in 2009, but
3,741 civil service positions were eliminated nationwide through retirements. Modest
progress was made in the decentralization process, where a progressive approach was
ultimately adopted in regard to the principle of transferring 40 percent of national revenue and
authority to the provinces. The transfer of powers is currently limited to the functions of the
provincial governments and assemblies, and is supported by an institutional and human
capacity strengthening program. The proposed framework law on the organization and
7
operations of the Independent National Electoral Commission and the proposed annex to the
electoral law establishing the distribution of seats were adopted.
In regard to economic governance, the government continued its program to modernize the
public financial management system and financial administrations (establishment of
provincial tax centers, conversion of the Customs and Excise Office (OFIDA) from
government enterprise to government agency, creation of a unit within the tax administration
(DGI) responsible for strategic sectors such as mining and telecommunications) and a legal
and regulatory framework (proposed public finance act, proposed customs code, promulgation
of a public procurement code). The expenditure cycle was extended to all expenditures,
including emergency expenditures, to ensure transparency and traceability of government
financial operations. The government adopted the Strategic Plan for Public Finance Reform
(PSRFP) in March 2010.
In regard to public debt, the prime minister issued a regulatory text confirming the central
role of the Directorate of Public Debt (DGDP), and an automated debt management system
was installed.
Other significant actions. A new regulatory framework (National Statistics System, SSN)
governing the production and use of statistics in the DRC was implemented in February 2010.
Laws providing for the conversion of public enterprises and the government's withdrawal
from commercial enterprises were implemented. The improved business climate, intended to
improve the DRC's position in the Doing Business ranking, was central to the DRC's
ratification of the OHADA Treaty. Also noteworthy was the creation of the Arbitration Center
and National Mediation Center, which were provided with furniture, equipment, and
information systems. Measures were implemented to simplify the creation of businesses. An
AML/CFT and financial intelligence unit was established and began operations in October
2009.
To improve information on the employment situation in the DRC, two systems were
implemented in February 2010, a registration system for individuals seeking employment and
the Better Job Market Management through Effective Data Processing (PIEGMA) program.
Policies to support economic growth targeted agriculture, rural development, forests and the
environment, mines and hydrocarbons, energy, and transportation infrastructures. The
government adopted the harmonized agricultural and rural development strategy. It finalized a
majority (30 of 42) of the implementing regulations under the 2009 forestry code. The first
report under the Extractive Industries Transparency Initiative (ITIE), covering 2007, was
produced in 2009 and is pending validation by an independent consultant. In regard to
electricity production, an investment program funded the completion of a number of actions,
including: (i) rehabilitation of Group 3 at the Inga 2 plant; (ii) acquisition of a Francis turbine
runner at the Inga 2B plant; (iii) completion of a rehabilitation study for the Zongo plant; (iv)
installation of a 500 KVA floating hydropower plant at Kananga; and (v) the provision of
electric power to the city of Kindu.
In regard to transportation infrastructure, 22,900.60 kilometers of roads were completed,
representing 113 percent of the target of 20,352.05 kilometers. The principal efforts involved
modernization, rehabilitation, re-opening unpaved and rural roads, and large-scale
maintenance projects.
8
Significant progress was made in providing access to basic social services. In the education
sector, the government's actions raised primary school enrollment from 64.1 percent in 2006
to 84.3 percent in 2008, compared to a target of 80 percent projected in 2005. Enormous
challenges remain in regard to tuition-free, universal primary education and the achievement
of Millennium Development Goals (MDGs). In the health sector, in addition to legal and
regulatory measures, a number of national campaigns were conducted to combat disease
(polio vaccination campaign, distribution of vitamin A and insecticide-treated mosquito nets,
and vaccination of over 2 million infants under age one with financial support from the Global
Alliance for Vaccines and Immunisation (GAVI) and the United Nations Children's Fund,
UNICEF). Additional actions reduced the under-five mortality rate from 172 to 148 per
thousand over the reporting period; stabilized the neonatal mortality rate at roughly 38 per
thousand; and increased BCG vaccination coverage. Finally, in regard to urban and rural
drinking water supply, the rehabilitation of water collection plants in Lukaya and N'kjili and
construction of the second water collection plant in Boma served to increase access to
drinking water to approximately 27 percent.
In regard to the fight against HIV/AIDS, the strategy focused on preventing and stabilizing
the transmission of HIV and sexually transmitted infections (STIs), accelerating treatment,
improving the quality of life of persons living with HIV/AIDS, attenuating the socioeconomic
impact of HIV/AIDS on the community, and strengthening coordination, monitoring, and
evaluation capacities at all levels.
In the chapter on institutional arrangements for implementation, monitoring, and evaluation,
the government recognizes weaknesses in strategic coordination at both central and provincial
levels. In contrast, the implementation, monitoring, and evaluation activities of sector-level
entities proceeded as planned, with support from technical and financial partners (TFPs).
Beginning in mid-2009, the government began to address the situation by instituting weekly
meetings to monitor progress toward reaching the completion point triggers under the HIPC
Initiative.
To facilitate monitoring and evaluation of the Growth and Poverty Reduction Strategy,
appropriate indicators were defined in the sectors identified as priorities in the first-generation
GPRSP (education, health (including HIV/AIDS), agriculture, rural development,
transportation infrastructure, and water and sanitation).
In conclusion, the Congolese government is pleased to have initiated an effort, with support
from its technical and financial partners, to systematize its medium-term development
planning, and to have resolutely done so in a very hostile domestic and external context. The
results achieved are less important than the ultimate adherence to an approach that represents
a clear break with ad hoc practices that marked years of poor governance.
The first-generation GPRSP would have produced more successful results were it not for the
constraints faced over the entire implementation period, chief among which were:
- Limited internal resources to finance the GPRS, due to government revenue remaining
low despite a relatively high rate of growth. This situation was exacerbated by a
contraction of budgetary support following suspension of the program supported by the
PRGF, which slowed the pace of reforms;
- De-linking of the priority action plan (PAP), a key tool in implementing the GPRS,
9
from the national budget, preventing it from being executed through the expenditure
cycle. This situation is the result of lack of cohesion between the Budget Preparation
and Monitoring Department, the Planning Department, and the sector ministries;
- Lack of communication between the government and the Bretton Woods institutions,
which initiated the planning approach through the GPRSP, in regard to a the use of a
tool that was in an experimental phase in a post-conflict country. This state of affairs
was not conducive to the understanding or full-fledged adoption of such an approach;
- Burdensome administrative procedures imposed on project execution by both TFPs and
the government, impacting project cost evaluations in most cases;
- Social and political uncertainties created by the tensions of the 2006 elections,
exacerbated by the climate of insecurity in the eastern part of the country, and their
repercussions for public financial management and macroeconomic stability;
- The international food and financial crises followed by the collapse of commodities
prices, which had devastating effects on economic activity and the management of
public finances and currency.
Despite the constraints identified above, implementation of the GPRS produced encouraging
results, as summarized below:
- Social sector indicators (health, HIV/AIDS, education, water and sanitation)
improved. The greatest gains were made in the education sector, where the various
indicators are on par with those of sub-Saharan African countries.
- The macroeconomic programs implemented during the period under review restored
macroeconomic stability, as demonstrated by the conclusion of the IMF Extended
Credit Facility in December 2009. However, the modest performance observed in
regard to budgetary and monetary policies could have been strengthened if the reform
program had not slowed, in which case the macroeconomic policies would have made
a significant contribution toward reducing poverty.
- The emergency sector programs, projects, and actions in the areas of planning,
security, transportation infrastructure, health, education, and water have restored peace
and security and improved socioeconomic conditions, albeit slightly, for the
Congolese people. They had a genuine impact on poverty reduction, primarily in terms
of improved economic and social infrastructures and access to basic social services.
The results described represent the execution of only half of the actions planned.
- The government recognizes that the strategic coordination of the GPRS was not
commensurate with the importance of the issues at stake. It notes, however, that the
weekly meetings instituted in the second half of 2009 to monitor progress on the HIPC
Initiative completion point triggers signal a new direction in adapting government
programs. In this regard, the government expects to intensify and rationalize its efforts
in the context of the second-generation GPRSP.
Recommendations
10
The recommendations draw on the lessons learned from implementation of the first-
generation GPRSP. They shed light on the options that could emerge from the participatory
consultations on the second-generation GPRSP. Certain GPRSP pillars, noted below form the
basis of tomorrow's challenges:
a) Consolidating peace and security through continued actions to complete the
pacification of national territory and end the humanitarian crisis, and by accelerating
reform of the security sector;
b) Expanding the government's capacity to deliver quality social services by creating
consensus as to the government's role and the need to better focus that role on its
sovereign missions, and adapt the central and provincial administrations accordingly;
c) Promoting administrative and economic governance by continuing the decentralization
process, adjusting it to reflect our available resources; through a relationship of
accountability between government and the governed; through continued financial
reforms and reforms of public enterprises; and through a genuine commitment to
transparent mechanisms in managing natural resources (EITI++);
d) Strengthening the conditions of sustainable growth, through an improved business
climate and implementation of a roadmap to raise the country's standing in the "Doing
Business" category; intensified support for sectors with growth potential and the road,
energy, and transportation infrastructures; and implementation of an aggressive
commercial policy;
e) Giving serious consideration to the effects of climate change and issues pertaining to
nature conservation; and
f) Mobilizing the private sector (including through public-private partnerships) to
address the problems of financing development programs.
In reference to the important task of monitoring and evaluation, the government will face six
major challenges: (i) reviewing and formalizing the monitoring-evaluation framework; (ii)
securing the production of statistical data; (iii) renewing the operational and budgetary
programming framework; (iv) implementing reporting tools: (v) developing a minimal
framework for evaluating public policies; and (vi) increasing participation and
communication.
11
INTRODUCTION
The Government of the Democratic Republic of Congo (DRC) issues its second report on
implementation of its Growth and Poverty Reduction Strategy Paper (GPRSP) for 2009 and
its projections for 2010. This fulfills a twofold commitment made in adopting the GPRSP:
first, to prepare an annual report on progress under the National Growth and Poverty
Reduction Strategy (GPRS) in reference to the objectives of that strategy and the Millennium
Development Goals (MDGs). In this regard, a midterm report on progress in implementing
the GPRSP (for the period April 2007 to December 2008) was issued at end-2008; and
second, to accomplish, through the progress report, one of the triggers required to reach the
completion point under the Enhanced Initiative for Heavily Indebted Poor Countries (HIPC).
The DRC is determined to accomplish all of the HIPC completion point triggers in order to
qualify for cancellation of substantial stocks of external debt under both the HIPC and the
Multilateral Debt Reduction Initiative (MDRI).
In view of its participatory nature, the GPRSP is the frame of reference for the development
of the DRC's economic and social development policies and programs. It establishes the
approach and the clear, harmonized, shared objectives underlying the development of those
policies and programs. It provides the framework for coordinating the efforts of the
government and its social and external partners both in implementing the strategic pillars and
in mobilizing the resources to finance implementation. The elected administration based its
program and contract of governance (2007-11) on the strategic pillars of the GPRSP and
secured its adoption by the Parliament in March 2007.
Preparation of the GPRSP occurred in two phases that required more than one year to
complete due to practical difficulties, including limitations of the statistical apparatus and
weakened human and institutional capacities in formulating development policies, the delayed
consequence of years of political, economic, and social instability.
In the first phase, a participatory approach begun in 2001 led to the preparation of an interim
version of the poverty reduction strategy paper (PRSP-I), in light of the difficult context
marked by the initial steps away from armed conflict and government efforts to restore
authority over the national territory and institute good governance. Through the successes of
one year's implementation of the PRSP-I and six months' execution of one of its key
components, the program supported by the Poverty Reduction and Growth Facility (PRGF),
the DRC reached the decision point under the enhanced HIPC Initiative in July 2003 and was
granted debt relief representing approximately 90% of the State's debt service, which was
used to finance poverty-reduction expenditures.
In the second phase, a final version of the poverty reduction strategy (which had since become
the Growth and Poverty Reduction Strategy Paper, GPRSP) was developed through a
participatory approach involving all sectors of the population and the development partners.
At the end of the process, the final version of the first-generation GPRSP was adopted by the
transition government in July 2006, and subsequently endorsed by the government elected
through free and democratic elections in March 2007. It was then presented to the World
Bank Board of Directors and the IMF Executive Board, which adopted it in March and April,
2007, respectively. Following practical difficulties, the action plan for implementation of the
first-generation GPRSP was finalized in July 2007. It should be noted, however, that the
12
actions undertaken in 2006 with government and external financing had previously been
finalized in the context of the Growth and Poverty Reduction Strategy (GPRS).
In July 2006, when the final version of the GPRSP was adopted by the transition government,
the DRC was no longer under the formal program supported by the PRGF under which the
macroeconomic stabilization efforts could be evaluated. This was an important element
missing from both the second Enhanced HIPC completion point trigger and Pillar 2 of the
GPRSP. An IMF staff monitoring program was instituted to restore the necessary conditions
for conclusion of the new program under the PRGF. However, while awaiting renewal of that
program, which would support the macroeconomic stabilization and growth program as one
of the pillars of poverty reduction, and to allow sufficient time to prepare the second-
generation GPRSP covering the period 2011 to 2015, the government decided in July 2009 to
extend the term of the first-generation GPRSP to December 31, 2010.
After several renewals of the IMF staff monitored program on grounds of insufficient results,
the government succeeded in December 2009 in demonstrating the outcomes required to
conclude a new program under the new Extended Credit Facility, thereby filling the gap in the
GPRS and kindling hopes for achieving the HIPC completion point by no later than June
2010.
However, it is important to bear in mind the historical context in which the final GPRSP was
prepared and implemented.
Context surrounding the preparation and implementation of the final GPRSP
The process of preparing the final version of the GPRSP, begun in 2003, and its
implementation beginning in July 2007 took place in an extremely difficult context marked
by:
- Widespread damage and destruction of economic and social infrastructures, posing a
formidable obstacle to growth and development of the private sector,
- Uncertainties in regard to preparing and organizing the first genuinely free and
democratic elections in a climate of heightened tension,
- Resumption of hostilities in the eastern part of the country, bringing grave humanitarian
consequences,
- The global food and energy crises,
- The international financial crisis (the most serious since the Great Depression of 1929),
- The collapse of commodities prices and resultant contraction of government revenue,
- Lack of budgetary support since the 2006 suspension of the PRGF program, and
- Weak human and institutional capacities, particularly in the areas of statistics
management, policy formulation, and the monitoring and evaluation of policy
implementation.
13
All of these factors adversely affected the management of public finances and currency and
weakened the macroeconomic framework with volatile swings in the inflation and exchange
rates and a sharp decline in economic activity. Moreover, they delayed the program of
reforms, leading to disappointing results under both the IMF staff monitoring program and
sector projects and programs. In particular, public financial management continued to contend
with an obsolete legal framework, opaque budgetary procedures, ineffective control
mechanisms, and lax budgetary schedule.
The environment, then, was hardly conducive to the DRC's fully embracing and embarking
upon an unprecedented task of the scope, complexity, and technical rigor involved in the
preparation and implementation of the GPRSP.
Report methodology
The report on implementation of GPRSP was prepared during March 2010 through a
participatory approach that involved various working groups conducting sector reviews in
addition to an overall review. These working groups comprised close to 500 participants,
including representatives of the Parliament, the Office of the President, the Prime Minister's
office, the public administrations, social society organizations, the technical and financial
partners (TFPs), the private sector, and the provincial governments.
The sectors identified in the GPRSP as priorities (health, education, and water and sanitation)
and as having growth potential (agriculture and rural development) were reviewed separately.
Civil society organizations also formed working groups to compile their assessments with
respect to implementation of the GPRSP. The results of these evaluations were presented at
the general review of the GPRSP on March 8 and 9, 2010.
The evaluation of the GPRS implementation basically addresses actions undertaken both
under the priority action plan (PAP) and otherwise during 2009. Note that this report does not
address the incidence of poverty. Given that no new 1-2-3 survey was conducted during
implementation of the GPRS, it was not possible to update the poverty profile and identify
trends. The government expects to launch the survey, with support from the TFPs, no later
than October 2010, which will enable it to gather the information required to analyze poverty.
In addition, the DRC's development partners conducted a midterm assessment of the Country
Assistance Framework. The conclusions of their evaluation were incorporated into this report.
Framework
The introduction to this report reviews the purpose of the report and the steps taken in
formulating the GPRSP, and describes the context surrounding the preparation of the GPRSP
and the methodology used to review the implementation of the GPRS. The remaining three
chapters of the document address the principal pillars of the GPRS, macroeconomic policies,
sector policies, and the monitoring and evaluation mechanism.
The first chapter reviews macroeconomic performance between January 2009 and March
2010, which demonstrated that domestic growth and price stability, brought about by rational,
prudent budgetary and monetary policies, influenced poverty. This section also reviews sector
budget allocations to highlight the quality of public expenditure, particularly in respect of the
GPRS priorities.
14
The second chapter reviews sector policy results and trends in terms of improved social
conditions for citizens.
The third chapter addresses the operation of the GPRS coordination structure and the
monitoring and evaluation mechanisms.
The conclusion reviews the lessons learned from implementation of the GPRS and
recommendations in terms of future challenges.
15
Chapter 1. ANALYSIS OF MACROECONOMIC PERFORMANCE AND
EXPENDITURE
Introduction
One of the pillars of the war on poverty identified in the participatory consultations was the
consolidation of macroeconomic stability and growth. It is important, then, to evaluate the
results of the economic and financial policies implemented in the context of the GPRS. To
that end, two macroeconomic stabilization programs were executed.
The first program covered the period from 2006 to November 2009 (independent IMF staff
monitoring program), and was instituted in April 2006 following suspension of the PRGF
program. The second program, supported by the Extended Credit Facility, was concluded in
December 2009. Sector reforms were implemented in support of that program. The evaluation
focuses on the results of macroeconomic policies conducted in 2009 and early 2010. The first
part of this chapter examines macroeconomic performance, and the second reviews budget
allocations by category and by GPRSP pillar and component.
1.1. Recent developments in the Congolese economy
The effects of the financial crisis continued to weigh heavily on the Congolese economy
during 2009. The decline of mining exports, primarily in the first half, and their effects on the
rest of the economy considerably dampened economic activity.
1.1.1. Economic activity and prices
In 2009, economic growth slowed in comparison with the previous year (6 percent) but was
slightly above the established target. According to central bank (BCC) estimates based on
end-December 2009 business surveys, real GDP growth was 2.8 percent compared to an
objective of 2.7 percent, the result of a third-quarter recovery in the mining sector and
spillover effects on the tertiary sector.
Inflation reached 53.4 percent, corresponding to an annual average of 46.1 percent, compared
to a target of 48.7 percent. The indicative US dollar-Congolese franc exchange rate was 902.7
at end-December, representing a depreciation of 29.2 percent compared to the same period of
2008.
1.1.2. Public sector
The overall public sector financial situation improved from 2008 to 2009 despite the fact that
not all external resources programmed were disbursed. Domestic revenue excluding
[concession-related] bonuses fell, reflecting a drop in customs and petroleum receipts as a
result of the international financial crisis. The government remained determined to control
spending to maintain macroeconomic stability, despite increased security expenditures due to
the worsened security situation in the eastern provinces and recently in the west. As a result,
16
the domestic budget deficit (cash basis) was -3.1 percent of GDP, compared to a projected
surplus of 3.3 percent.
1.1.3. External sector
The Congolese economy withstood the effects of the international financial crisis in 2009,
with a better overall external position in comparison to the previous year. The current account
deficit, which increased sharply in 2008 to nearly 15.9 percent of GDP due to increased
imports and the drop in prices of key commodity exports (particularly copper and cobalt
during the second half of 2009), declined to about 12.9 percent of GDP in 2009. This reflects
a substantial increase in emergency international aid, which enabled Congolese authorities to
limit the impact of the financial crisis on the economy. Disbursement of the first tranche of
funds under the Sino-Congolese arrangement also helped cushion the exogenous shock.
These positive developments and increased balance-of-payment support from the IMF,
especially the general and special allocations of special drawing rights (SDR) totaling SDR
424.5 million (approximately US$662.3 million) and disbursements under the Exogenous
Shocks Facility and Extended Credit Facility, significantly increased international reserves in
2009, despite low levels observed in first quarter 2009. International reserves, which stood at
US$27.16 million on March 11, increased to US$999.4 million, representing 9.1 weeks of
nonaid imports.
1.1.4. Monetary sector
The money supply expanded, due essentially to external contributions despite improvement
of public finances. Of the 50.5 percent increase in comparison to the previous year, 66.1
percent was contributed by net domestic assets, despite a 26.3 percent decline in net credit to
the government. The share of internal assets contributing to growth was also significant, at
33.4 percent including external financing disbursed in 2009, and allowed the BCC to execute
currency market interventions totaling US$124 million to control volatility. In addition,
under its restrictive policy to limit deviations of inflation from the targeted 31.2 percent, the
BCC modified the official rate three times in 2009 (in January and October) raising it from
40 percent at end-2008 to 55 percent, 65 percent, and 70 percent, and increase the required
reserve ratio from 5 to 7 percent between January 2008 and October 2009.
1.1.5. Economic situation at end-March 2010
Macroeconomic developments at end-March 2010 were encouraging. Year-to-year inflation
declined from close to 47.6 percent in February to 34.3 percent in March, and annualized
inflation stood at 19.6 percent in March compared to 50.9 percent in February and an annual
target of 15 percent. The Congolese franc (CDF) appreciated 1.6 percent against the US
dollar, from CDF 921.1 at end-February to 906.3 at end-March. The lull in currency and
goods and services markets allowed management of the treasury plan on a cash basis,
resulting in a budget surplus at end-March 2010. Amid the relative stability, the BCC
lowered the base rate on March 23 to 52 percent from 70 percent (in February) to reduce the
positive spread.
17
Figure 1. DRC Economic Trends, 2002-2008
En d e pit d 'u" ralent issementces dem ieres Les re sultats budg.Haires ont ete inegaux, et Ie
annees, la croissance a ete fenne ... deficit s'est h! gerement creuse en 2007-08 ...
12
Contribution a la croissWlce pCI' secteur
Recettes, depenses e t solde budge taire
30
10 (pourcentage du PIS)
· Mining C T ertiary B Secondary O Agricultur
20 Racette Soldeglobal
8 ~
10 t
I
I~ I V
6
o
4
-10 ...........
2 -20 ·
Depenses
o -30
2002 2003 2004 2005 2006 2007 2008 2002 2003 2004 2005 2006 2007 2008
ce qu i s'est traduit parune augmentationdu une flam bee de I'inflation , ...
cred it net a l'Etat et de la monnaie centrale ·...
450 35
Mon n aie centrale e t credit net a I '~tat Inflation
400 (mil liards d efrancs congolais) (variation an nuelle en pourcentage)
30 ,
350 I '\. J". Produits
300
M on naie ce nt rale
......... 25 GIOba l~1 "< alimen t aires
250 20
I
- , '
200 Cre dit net a l'Etat
15
150
1\ 10
r
100
50
o n nr I 5
o
Combustib les
2002 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008
Ie deficit du compte exterieur courant ... et les reserves ont chute .
s'est creuse, ...
120 Expo rtations, importationset 7
co mp te coura nt (pourcentage d u P IS ) R eserves officiellesbrutes
100
80 Termes de I'echc:nge 200 200
(axed roiB) 5
60 E xportations
40
20
(axed roite)
-
't __ .... 160
120
150
3
o 100
-20 80
-40 Compte co urant (axe gaJche) 40 50
-60
Impo rtations (axegaudle)
-80 o o -1
2002 2003 2004 2005 2006 2007 2008 2002 2003 2004 2005 2006 2007 2008
Sources: Autorites congo laises et estima t ions des services du FMI.
NOT: grn ph ique 1 : Mines; Tertiaire: Secon d aire; Agricu ltu re.
18
[Text of preceding tables]
Figure 1. DRC economic trends, 2002-2008
Solid growth despite the slowdown Budget outturn was uneven and the deficit grew
in recent years slightly in 2007-08
Contribution to growth by sector Revenue, expenditure, and budget balance
Mining Tertiary Secondary Agriculture (percent of GDP)
Revenue Overall balance
Expenditure
which is reflected by an increase in net credit to ... skyrocketing inflation,...
the government and central bank money ...
Central bank money and net credit to the Inflation
government (billions of Congolese francs) (annual variation in percent)
Central bank money
Overall Food products
Net credit to the government
Fuels
the current account deficit grew, ... ... and reserves fell.
Exports, imports, and current account Gross official reserves
(percent of GDP)
No. weeks goods
Terms of trade and services imports
(right axis) (right axis)
Exports
(right axis) Millions
(left axis)
Current account (left axis)
Imports (left axis)
Sources: Congolese authorities and IMF estimates.
19
1.2. Expenditure analysis
1.2.1. Analysis of budget expenditure by category
Overall, the government budget execution rate was 63.2%. This under-execution represents
an increase of 13 percent in comparison with the previous year. Compared to GDP, however,
it represents a decrease of roughly 4 percentage points, largely explained by the decline in
revenue produced by the international financial crisis, described in the above paragraph on
macroeconomic performance, particularly in the public sector. The under-execution conceals
the overrun in the "defense" function representing 0.6 percent of GDP, which was more than
offset by under-consumption in all other functions except "religion, culture, sports, and
recreation," for which the impact of the global overrun was deemed minor. Note that the
"Central public administration" and "national defense" functions alone absorb more than
one-half of credit, compared to the two-fifths provided in the budget.
Figure 2. DRC - Budget composition by function, 2006-09
(As % of GDP)
Personnel expense in proportion to total primary expenditure decreased from 35.2 percent to
32.9 percent between 2008 and 2009. This demonstrates the government's close attention to
this item in economic programming, given that it can be a potential source of inflationary
pressures in a context of limited capacity to mobilize domestic resources.
Current non-salary primary expenditure remained the largest item of public expenditure. This
was due primarily to government transfers and interventions, which increased from 22.7
percent to 33.0 percent of primary expenditure between 2008 and 2009 following
decentralization and transfers to revenue-collecting agencies. In contrast, the proportion of
spending for goods and services declined sharply over the period, from 6.6 percent of
primary expenditure in 2008 to 3.9 percent in 2009, well below the level needed to support
effective functioning of public administrations.
20
Figure 3. DRC - Composition of primary expenditure by category, 2009
Investment
Personnel
Transfers and
State interventions
Service
expenditures
Goods and materials
Public investment expenditure declined from 4.7 percent of GDP in 2008 to 4.3 percent in
2009. The overall share of these items in proportion to total primary expenditure remained
stable at roughly 21 percent between 2008 and 2009. However, this ratio is clearly inadequate
to meet the reconstruction objectives fixed by the government. At the same time, much of
this investment is financed by external resources, which are not fully captured in the national
budget. In other words, the above analysis underestimates public investment.
In 2009, repayment of principal represented 4.7 percent of total public expenditure, compared
to 3.6 percent in 2008. Interest payments on the debt represented 3.1 percent of public
expenditure in 2009, compared to 3.8 percent in 2008 and 9.8 percent in 2004. Total debt-
related public expenditure represented 7.9 percent of GDP in 2009 compared to 7.4 percent in
2008. Public debt remains a significant burden for the government, representing 7 percent of
total public expenditure in 2009, more than all health-related spending for the same year. It is
essential, then, that the DRC achieve the HIPC Initiative completion point in order to free up
additional fiscal headroom needed for a more active development policy.
1.2.2. Public expenditure in relation to GPRSP priorities1
The analysis of expenditure by pillar following Figure 4 below highlights the importance of
the strategic pillar "Promoting good governance and peace." Spending for this pillar
represented roughly 60 percent of primary expenditure in 2009. This spending was bloated by
increasing sovereignty and security expenditure relating to the conflict in eastern Congo, and
recently in the West, and above all by transfers to the provinces and revenue-collecting
1
The analysis of budget allocations to the various sectors of the national poverty reduction strategy required the
preparation of a correspondence table to convert functional budget classifications to the thematic classifications
used in the GPRSP. The table shows primary public expenditure for the period broken down by strategy pillar
and sector. Certain approximations were unavoidable in re-classifying the functional categories by pillars and
sectors. Also, since it was not possible to segregate expenditures for Pillar 4, "Combat HIV/AIDS," from Pillar
5, "Local initiatives," they are not presented in the analysis but are included in Pillar 2, "Support sectors with
growth potential" and Pillar 3, "Promoting access to basic social services."
21
agencies. The predominance of this spending reflects the post-conflict context and the need to
strengthen institutions and administrations and consolidate peace.
Figure 4. Budget execution by strategic pillar, 2006-09
(As % of primary expenditure)
The second most important pillar is Pillar 3, "Promote access to basic social services," which
declined slightly in proportion to total primary expenditure, from 24.9 percent in 2008 to 23.6
percent in 2009. Pillar 2, "Supporting sectors with growth potential," increased from 16.2
percent in 2008 to 16.5 percent in 2009.
22
Figure 5. Composition of budget expenditures by strategic pillar, 2009
Graphe 1. Budget exécuté par pilier Graphe 2. Dépenses de bonne gouvernance et de paix
24%
34% 33%
16% 60%
33%
Bonne gouvernance et paix (hors dette publique) Gouvernance politique et administrative
Appui aux secteurs porteurs de la croissance économique Gouvernance sécuritaire
Accès aux services sociaux de base Gouvernance économique (hors dette publique)
Graphe 3. Dépenses d'appui aux secteurs porteurs de la croissance Graphe 4. Dépenses d'accès aux services sociaux de base
Eau Electricité Culture,
Pauvreté
4% 3% sciences et
urbaine et
accès à la
habitat
Environnement technologie
2%
2% universelle
5%
Agriculture, Protection
sylviculture, sociale
chasse et pêche 6%
21%
Autres 1/
Transport
17%
62% Enseignement
0%
Santé
25%
1/ Autres comprend les secteurs des Bâtiments et Travaux Publics (2,9%), de l'énergie électrique (2,8%), des hydrocarbures (3,7%), des industries extractives
(2,1%), industries
manufacturières (1,2%), des services marchands (0,8%) et des télécommunications (3,3%).
23
[Text of preceding pie charts]
Figure 5. Composition of budget expenditure by strategic pillar, 2009
Graph 1. Budget executed by pillar Graph 2. Expenditure supporting good governance
and peace
[Key:] [Key:]
Good governance and peace (excluding public Political and administrative governance
debt)
Security governance
Support sectors with economic growth
potential Economic governance (excluding public debt)
Access to basic social services
Graph 3 Expenditure supporting sectors with Graph 4. Expenditure supporting access to basic
growth potential social services
[Key, clockwise from lower left:]
[Key:] Red: Health 25%
Green: Transportation Purple: Social protection 6%
Blue: Agriculture, forestry, hunting, and fishing Turquoise: Environment 2%
Red: Other Gold: Water 4%
Light blue: Electricity 3%
Pink: Urban poverty and habitat 2%
Green: Culture, science, and universal access to
technology
Blue: Education
1/ Other includes the following sectors: building and public works (2.9%), electricity (2.8%), hydrocarbons
(3.7%), extractive industries (2.1%), manufacturing industries (1.2%), public services (0.8%) and
telecommunications (3.3%)
24
The above graphs confirm the substantial expenditures devoted to political, security, and
administrative governance, totaling roughly two-thirds of primary expenditure for all of
2009. This increase could be explained by significant over-execution in 2009, close to 180
percent, relating to emergency security measures. Spending on economic governance
(excluding debt) is also substantial in proportion to total primary expenditure following an
execution rate of only 191.7 percent.
The sector-specific analyses clearly show that transportation, particularly road infrastructure,
accounts for over one-half of spending for this pillar. However, the execution rate for this
sector appears particularly low, with less than 30 percent of Pillar 2 expenditure executed in
2009. The next largest sector for this pillar is agriculture, although it represents only one-
third the amount of transportation spending. Finally, the extractive industries, manufacturing,
and building and public works (excluding roads) represent a small proportion of Pillar 2
expenditure.
Social expenditure (Pillar 3) declined relative to GDP, from 5.8 percent of GDP in 2008 to
4.6 percent of GDP in 2009, and its relative share in proportion to total primary expenditure
declined over 2008-09. The largest sector of the pillar in terms of expenditure was education,
which declined in proportion to total primary expenditure from 13.7 percent in 2008 to 12.4
percent in 2009. Despite a high execution rate, close to 74 percent, spending in this sector
relative to GDP declined from 3.2 percent of GDP in 2008 to 2.4 percent in 2009. The
second-largest social sector, health, was more stable relative to total primary expenditure,
increasing 0.2 percentage points between 2008 and 2009. The execution rate in this sector
was relatively weak, at 61.6 percent in 2009. The share of spending on other social sectors
(social protection, environment, urban poverty and housing, and culture) was relatively
marginal in terms of both GDP and total primary expenditure, remaining flat or declining
slightly over the period. Given the crisis context, execution rates for these sectors varied
widely and were generally low, particularly for social protection, the environment, and water.
1.3. Medium-term macroeconomic prospects
The government recognizes that continued, sustainable growth in a stable macroeconomic
climate is essential to reducing poverty. The medium-term macroeconomic objectives remain
in line with those agreed in the recent PRGF arrangement. Stated in quantitative terms, the
objectives are: (i) reduce year-to-year inflation to 9 percent by end-2012; (ii) increase
international reserves to 10 weeks of nonaid imports by end-2012; and (iii) achieve real GDP
growth in the range of 6 percent per annum. To achieve these objectives, the government
intends to reduce the domestic balance and refrain from central bank financing while
increasing fiscal headroom to provide essential public goods. It will achieve this by
implementing reforms to increase revenue and rationalizing and prioritizing public
expenditure. Progress in the consolidation effort will strengthen the central bank's capacity to
meet inflation objectives. The government will continue economic reforms to promote the
private sector, the driver of the Congolese economy. These policy options were among the
principal recommendations of the 2007 Article IV consultations. The government will also
adjust the composition of expenditure to better serve the objective of reducing poverty.
25
Chapter 2. ACTIONS IMPLEMENTED
Introduction
We review below the record of reforms and projects implemented in an attempt to explain the
decline of property. We should note, however, that it was not possible to undertake the task of
establishing cause-and-effect relationships during implementation of the GPRS, for the
following reasons:
- The sector ministries included a number of actions in the priority action plan (PAP)
despite insufficient visibility in terms of feasibility studies and identification of
confirmed sources of financing. Several actions reflected intentions expressed by
partners or ministers for which the costs and execution time tables had not been
determined;
- Certain TFPs preferred to execute the projects or activities they financed directly, with
support from sector ministries or NGOs;
- The PAP and the budget were not reconciled in regard to executing the actions
identified in the PAP. However, in order to provide a comprehensive view of the
efforts undertaken to achieve the GPRS objectives, the report includes both PAP
activities and non-PAP activities aligned with GPRS priorities.
2.1. Promoting good governance and consolidating peace through strengthened
institutions
2.1.1. Security and judicial governance
a. Security
The government set itself the objective of consolidating national reunification and territorial
administration; accelerating integration of the army, police, and security services; and
ensuring the return and reintegration of displaced persons within and outside the country.
Actions were taken to reestablish peace and the government's authority in the eastern and
western provinces. The Goma peace accord (Amani Programme) signed on January 23, 2008
resulted in the cessation of hostilities with armed groups, assimilation of militiamen into the
regular forces (brassage), and the gradual disengagement of various armed groups.
The government launched the joint Umoja Wetu (Our Unity) operation with Rwanda, which
put down the CNDP rebellion and ended hostilities in the eastern part of the country. The
Congolese army, with support from the UN peacekeeping mission (MONUC), initiated the
Kimia I and II peace operations targeting the remaining pockets of armed groups. The effort
continues today with Amani Leo. The assimilation, disarmament, demobilization, and
integration of former CNDP combatants and other armed groups (Mayi Mayi, PARECO, etc.)
continued under several government programs, including the program supported by several
partners to pay ex-combatants US$100 to surrender their arms. In parallel, several units were
established and equipped at the the Kisangani, Kamina, and Ruberizi assimilation centers.
26
b. The judicial system
The government's policies in the administration of justice are based on reform, improving
access to justice, promoting and protecting human rights, modernizing the legal framework,
combating corruption and impunity, and strengthening human and institutional capacities.
The following actions were implemented or are in progress: (i) an organizational and
institutional audit of the Ministry of Justice, resulting in modification of the ministry's
structural framework; (ii) the drafting of the Constitutional Court act, which is pending
adoption by the Parliament; (iii) construction in progress on a new courthouse in the context
of the Governance Support Project (PAG); (iv) the organization of awareness-raising
campaigns for hundreds of citizens and users of public services in the provinces of Kinshasa,
South Kivu, Maniema, and Equateur; and (v) restructuring of the Conseil Supérieur de la
Magistrature, the administrative body of the judicial branch.
Box 3. Strengthened judicial system infrastructures
To promote the sound administration of justice, infrastructures supporting the courts, prosecutors' offices, and
penitentiary institutions were constructed or rehabilitated in the provinces of Kinshasa (the the Ndolo military
prison and the commercial courts of Kinshasa/Gombe and Kinshasa Matete), Bas-Congo, Bandundu (the Prison
du Cinquantenaire), North Kivu (the Beni magistrate's court and Goma military courthouse), South Kivu
(Kalehe and Uvira magistrate's courts, the Uvira and Bukavu military courthouses), West Kasai, East Kasai,
Orientale (the Aru, Mombasa, and Mahagi magistrate's courts), and Katanga (the Katanga commercial court). A
number of them were equipped for operation.
c. Army
In February 2008, a roundtable on security reform was held in Kinshasa and attended by a
number of bilateral partners. The roundtable produced the following recommendations:
- In the context of a new master plan, implementation of a Congolese coordinating unit
to review contributions to army deterrence programs, MONUC retraining efforts, and
the formation and equipping of general-purpose combat units;
- Rigorous control of personnel through biometric identification;
- Establishment of a rapid-response force capable of relieving the MONUC, securing
the eastern part of the country, and performing the constitutional responsibilities
incumbent on the army (implemented with financing from the Netherlands). This
effort was undertaken in 2008, implementing the second phase of the strategic plan for
reform of the army.
Regarding the military component of the master plan, the partners agreed to support the DRC
in implementing a human resources management tool.
d. Police
With support from the TFPs, the Government continued the work of modernizing the
Congolese National Police undertaken by the Joint Discussion Group on Reform and
Reorganization of the Congolese National Police (GMRRR). These reforms resulted in: (i) the
preliminary draft of a framework law, which has been submitted to the Parliament for
adoption, and establishment of the Police Reform Monitoring Committee (CSRP); (ii)
27
construction and equipping of an office building for the finance, budget, data processing, and
human resources departments; and (iii) collection of police force staffing data.
e. Sexual violence
The government is committed to eradicating sexual violence. The following actions were
implemented: validation of the communication and prevention strategy document on sexual
violence, meetings and advocacy actions among stakeholders in the fight against sexual
violence, implementation of a sexual violence hotline, informational activities in regard to the
law on sexual violence, and comprehensive care for victims of sexual violence.
2.1.2. Political and administrative governance
a. Public administration
The government's objective in this sector is to reorganize and modernize public services at all
levels of the public administration by strengthening the institutional framework and human
capacities and controlling staffing levels in the central and provincial governments. A draft
legal framework for the public administration was prepared in 2009 and is awaiting adoption
by the Council of Ministers. Also, in the interest of controlling civil service staffing, actions
were implemented to compile a comprehensive register and ensure the conformity of
employees and officials. Also, to reduce the average age and increase the efficiency of
government agencies, the government processed the retirements of 3,741 government
employees and officials nationwide during the period 2009-2010.
b. Local governance
The government's decentralization policy aims to: (i) allow citizens to participate in the
public sphere and formulate development policies in the areas that concern them; (ii) refocus
the central government mission on establishing major policy objectives; (iii) promote
rapprochement between government and the governed; (iv) simplify administrative
procedures and promote a participatory, inclusive culture to strengthen the development of
decentralized administrative entities.
To further the process of decentralization, a single, consensus-based frame of reference, the
Strategic Decentralization Implementation Framework (CSMOD), was established in June
2009. A gradual approach was adopted with respect to the principle of transferring 40 percent
of national revenue and authority to the provinces. In particular regard to the transfer of
authority, the functional institutions at this time are the provincial governments and
assemblies.
With support from the TFPs, the government also took action to promote local leadership,
accountability and skills in basic tools in the central and provincial administrations and
decentralized agencies. The program to train provincial deputies, decentralized agency
personnel, and civil society stakeholders in provincial and local planning processes continued
in the provinces of Bandundu, Katanga, Maniema, and South Kivu. The government also
conducted missions through the planning and budget ministries in 2009 to support the
development of planning and programming tools (the PAP, macroeconomic framework, and
medium-term sector expenditure frameworks) in all provinces, in cooperation with the World
Bank and the United Nations Development Program (UNDP).
28
c. Elections
The proposed law establishing the organization and operations of the Independent National
Electoral Commission and the proposed annexed to the electoral law establishing the
distribution of seats were adopted.
2.1.3. Economic governance
a. Tax and customs revenue policies
Tax policy and tax and customs administrations. The government is committed to
implementing an efficient, modern fiscal and customs policy. The proposed VAT law was
approved by the government and submitted to the Parliament for adoption. At the same time,
the government continued establishing tax centers in certain provinces. To improve security in
the collection of customs revenue, the Customs and Excise Directorate (DGDA) improved
information systems based on Asycuda++ by completing the migration from Asycuda 2.7 to
Asycuda++ at the Eastern Kinshasa and Kinshasa airport offices. The results of the first signal
test were conclusive. The Asycuda++ software was presented to all service providers at the
inspection certification offices (BIVAC) on Friday, January 22, 2010, and the DGDA
information center was officially launched on Tuesday, January 27, 2010. In addition, to
strengthen the supervision and implementation of reforms, the Customs and Excise Office
(OFIDA) was elevated by Executive Order (Décret) 09/43 of December 3, 2009 to an
executive agency under the Ministry of Finance to become the DGDA. The proposed new
customs code was also approved by the government on January 8, 2010 and submitted to the
Parliament for review and adoption.
Taxation of the mining sector and streamlining of exemptions. The government intends to
increase revenue by increasing mining sector contributions to domestic revenue and
rationalizing exemptions. Strategic, specialized sector units, including a mining tax unit, were
established within the DGDA Large Enterprise Department (DGE) on April 27, 2009. In
regard to rationalizing exemptions, the government adopted the report of the commission
charged with evaluating the tax incentives and exemptions provided under the Mining Code,
the Investment Code and special agreements in March 2010. The report includes an action
plan for implementing its recommendations.
b. Public financial management
Modernization of the public financial management system. The government recognizes
the need to modernize public finances to ensure effective budget preparation and execution.
To this end, a Strategic Plan for Public Finance Reform (PSRFP) was adopted by the
government in March 2010. The plan includes three components: (i) the strategy framework
document, which presents the government's strategic options in this area and serves as a
convenient reference for the various stakeholders in order to better coordinate actions; (ii) a
three-year action plan for reforms to be implemented in five areas: (a) budget planning and
preparation, (b) the fiscal system, (c) expenditure management, (d) accounting and cash
management, and (e) the system of controls, and (iii) indicative cost tables. The government
strengthened the mechanism for coordinating and implementing public finance reforms by
establishing the Steering Committee on Public Finance Reform (COREF) in August 2009.
29
Legal framework governing public financial management. The government adopted a
proposed law on public finance in March 2010. The proposed public procurement code was
adopted by the Parliament in April 2010 and is pending official publication; the implementing
regulations have also been prepared and will be promulgated following publication of the
code. Efforts are under way to revise the general public accounting regulations. The
government has also begun to rationalize revenue nomenclature used by the Directorate of
Administrative and State Revenue (DGRAD), anticipating forthcoming efforts to prepare and
adopt a proposed law on revenue nomenclature recognized by the provinces in accordance
with constitutional provisions.
Budgetary transparency, traceability of State financial operations, and control of wages
and salaries. In February 2010, the manual on the budget process and public expenditure
cycle was revised. The revision reflects the integration of emergency spending procedures in
the expenditure cycle. For the provinces, the March 2010 validation of the provincial
expenditure cycle manual established the standard for executing public expenditure. In regard
to the accounting system, the Treasury Management and Payment Authorization Office
(DTO) produced account balances through end-December 2009. The government improved
the reliability of the Simplified Transitional Procedure implemented in July 2007. A roadmap
was adopted to extend this automated procedure to all payroll items in all the provinces.
Budget monitoring reports were produced on a regular basis, despite certain weaknesses in
terms of reliability and completeness of information. The government is endeavoring to
correct malfunctions that persist in the budget monitoring system. Similarly, the expenditure
cycle was strengthened through the inclusion of payroll and public debt expenditure. In
parallel, the government undertook actions to modernize the cycle by acquiring new hardware
and more robust software. The government also intends to strengthen public financial control
through the support of oversight entities. In this regard, plans are under way to establish a
financial inspector's office and court of accounts.
c. Public debt management
The government is committed to pursuing a prudent borrowing policy to ensure that
public debt is sustainable. Government actions focused on strengthening institutional and
human capacities to manage debt and settling domestic debt. In this context, Executive
Order 08/04 strengthening the central role of the Directorate of Public Debt (DGDP, the
former Public Debt Management Office, OGEDEP) in managing public debt, was signed on
February 28, 2008, and implementation of the related action plan adopted in May 2008 began
with the launch of data collection efforts and informational activities. The DGDP also
collected data on public debt in Kinshasa and the provinces for the purpose of centralization.
In October 9, the government amended the cooperation agreement with a consortium of
Chinese enterprises to ensure that its terms were compatible with the imperatives of
debt sustainability. The accord provided sovereign guaranteed financing for project
infrastructures totaling US$3 billion. The debt contracted to finance the project will be repaid
from profits of the joint venture formed by Congolese public enterprise GECAMINES and the
Chinese enterprises. The sovereign guarantee would be executed only if the joint venture fails
to repay the full amount of the debt within the first 25 years of the joint venture, or 2034. In
this context, the government believes that the cooperative agreement contributes to the
objective of debt sustainability and incorporates the level of concessionality required to
ensure debt sustainability.
30
The government is normalizing relationships with all its creditors. On February 25, 2010,
the government concluded the eleventh rescheduling arrangements with Paris Club creditors
following approval of the new PRGF arrangement on December 11, 2009. Once the HIPC
Initiative completion point is reached, the authorities will open bilateral negotiations with
each of the Paris Club, non-Paris Club and Kinshasa Club creditors. The Paris Club secretariat
will provide the DRC with an ex ante valuation of the amount owed to each creditor prior to
the conclusion of bilateral negotiations. In addition, the World Bank has provided a grant to
the DRC to support repayment of its London Club commercial debt.
d. Restructuring the national statistics apparatus
The government identified statistics as a priority area of strengthening to improve policy
formulation and monitoring. To this end, the government strengthened the capacity of the
National Institute of Statistics (INS) by converting it to a public institution with separate legal
status. Currently, the production and use of statistics in the DRC are governed by Executive
Order 10/05 of February 11, 2010 on the National Statistics System (SSN). In addition, the
INS has made its DEVINFO human development database available online through its
website.
e. Promoting the private sector
Actions to promote the public sector proceeded in [four] directions, reforming public
enterprises, reviving the business climate, employment, and reforming the financial system.
· Reform of public enterprises
The actions taken in 2009 consisted of: (i) implementation of four laws reforming public
enterprises2 enacted in July 2008; (ii) the implementation of management contracts to
stabilize the technical and financial activities of the National Transportation Office
(ONATRA), the Congolese national railroad company (SNCC), and the National Aviation
Administration (RVA); and (iii) transfer of customs-related activities from the Ministry of
Trade Inspection Office (Office Congolais de Contrôle) to OFIDA (now the DGDA).
· Business climate
Actions in regard to the business climate included establishing commercial courts in Kinshasa
and Lubumbashi, ratifying the OHADA Treaty, and equipping the national arbitration center
and national mediation center with computer hardware and furnishings. Measures were also
implemented to streamline the process of creating enterprises.
To protect the financial sector from instability in regard to funds of doubtful origin, a
financial reporting and anti-money laundering and terrorism financing unit was created and
put in operation in October 2009.
· Employment
2
The laws concerned the conversion of public enterprises, the organization and operation of public institutions,
privatization of government-owned enterprises, and the organization and management of public enterprises.
31
The 2009-2010 PAP identified two programs to stimulate employment: (i) support for
formulation of the national policy on employment and professional training and jobs for
youths; and (ii) strengthened institutional capacities and human resources development. In
regard to the first program, a proposed national policy on employment and professional
training was drawn up in 2009 with support from the International Labour Organization. The
document was validated in March 2010 by committees formed in connection with the
thematic group.
In regard to strengthening the capacities of ministry and legislative secretariats and the Office
of the Labor Inspector (IGT), an information requirements questionnaire was drawn up and
administered in February 2010. In order to improve the quality of employment-related
information in the DRC, the National Employment Office (ONEM) implemented a
registration system for the jobless. The database includes 60,000 individuals seeking
employment at this date. In March 2010, ONEM began issuing biometric cards to registrants.
In the same vein, the Better Job Market Management through Effective Data Processing
(PIEGMA) program was implemented in February 2010, and the Employment and
Professional Training Observatory was also created.
Box 4. The PIEGMA Program
The Better Job Market Management through Effective Data Processing (PIEGMA) program is charged with: (i)
producing indicators on job opportunities and training by implementing a mechanism to monitor graduates and
other categories of job seekers in the labor market; (ii) publishing key market indicators; (iii) periodically
conducting surveys by compiling censuses, lists of occupations and similar tools to determine labor needs by
qualification in the national economy; and (iv) preparing job descriptions that specify the required skills,
conditions of access, and other terms relevant to each position to provide the job market with adequate
information on job opportunities.
· Financial system reform
To improve access to financing and strengthen the financial sector's role in reviving the
national economy, the standards and criteria for supervision of commercial banks were
strengthened. In July 2009, the BCC published statements of financial affairs for the two
public banks in liquidation (Nouvelle Banque de Kinshasa and Banque de Crédit Agricole). In
2008 and 2009, the government approved charters of private banks and micro-finance
institutions, thereby increasing the number of banks in the country and the level of financial
intermediation. In June 2009, a strategy was adopted to reorganize the BCC, streamline its
operations, and reduce its operating deficit. Actions to modernize the BCC and introduced
new liquidity management instruments are continuing.
2.2. Policies supporting economic growth
2.2.1. Agriculture and rural development
The government's objective in this sector is to restore a level of agricultural production to
meet the nutritional needs of the entire population, and restore the bases of social cohesion so
as to ensure sustainable peace and stability in the country. To this end, the Government
undertook institutional reforms of the Ministry of Agriculture and conducted a preliminary
institutional assessment; and developed a proposal for restructuring the Ministry of Rural
Development; and adopted a harmonized strategy for the agriculture and rural development
sector.
32
To support agricultural production,3 improved seeds were distributed and rural producers
were provided with training; these actions served to improve crop production and stabilize
prices. The physical achievements during implementation of the GPRSP include: (i) 10,317
kilometers of rural roads rehabilitated and 7,500 kilometers of rural roads being maintained
with financing from the Kingdom of Belgium; (ii) 120 kilometers of rivers and streams
improved; (iii) buoys installed in 40 kilometers of waterways with government financing; (iv)
three National Seed Service (SENASEM) laboratories rehabilitated; (v) 32 sources of
drinking water provided; (vi) four animal containment areas with paddocks and water troughs;
and (vii) 94 markets and storage facilities are being constructed with financing from the
African Development Bank in the provinces of Katanga, East Kasai, West Kasai, Bandundo,
and Bas-Congo.
In addition, 702 tractors and 30 cultivators were acquired and sent to all provinces and
selected National Institute for Agronomy Research (INERA) stations. Also noteworthy are the
purchase of 85 pair of draught animals and training of 125 pair of show animals and 410 pair
of farm animals. These actions served to maintain the agriculture and rural development
sector share in GDP at roughly 3 percent.
Despite the above outcomes, the agriculture and rural development sector continues to face
significant challenges in terms of access to markets and credit, particularly for investments;
access to technology and quality plant products; access to land and land management; and
labor availability and productivity.
2.2.2. Forest and the environment
The government's policy in regard to forests is to rehabilitate the sector and promote
sustainable management of flora and fauna to increase their contribution to the economic,
social, and cultural development of present and future generations.
To this end, the Government established the following objectives: (i) combat desertification
through sustainable management of lands and forests, (ii) promote awareness of forest laws;
(iii) reduce emissions due to deforestation and degradation, (iv) improve the forest
management information system, (v) strengthen the capacities of the ministry and its
agencies, and (vi) administer a national action plan to adapt to climate change.
The government finalized the majority (some 30 of 42) of the implementing regulations under
the forest code in 2009. At the same time, it strengthened commercial services and support to
the Sustainable Land and Forest Management Board by establishing a national committee on
forest and land degradation. Civil society stakeholders supported a number of local
communities in concluding terms of reference for monitoring of forest management plans. To
support implementation of the forest code, seminars and consultations were arranged as part
of the participatory zoning process in the provinces of Equateur, Bandundu, and Orientale.
3
Plans implemented in the context of restoring agricultural production and integrating and organizing rural
production areas: the Emergency Multi-Sector Infrastructure Rehabilitation and Reconstruction Program
(PMURR), the Agriculture and Rural Sector Rehabilitation Project in Katanga, West Kasai and East Kasai
Provinces (PRESAR), the Agriculture and Rural Sector Rehabilitation Support Project in Bandundu and Bas-
Congo Provinces (PARSAR), the Lake Tanganyika Integrated Regional Development Program (PRODAP), the
Program in Support of Community Development Initiatives (PAIDECO), the Orientale Province Agricultural
Recovery Program (PRAPO), the Equateur Province Agricultural Recovery Program (PRAPE), and the
Emergency Social Action Plan (PASU).
33
Informational campaigns about the forest code were also conducted through the provincial
administrative centers, with support from the United Nations Food and Agriculture
Organization (FAO).
Monitoring to reduce emissions due to deforestation and degradation commenced in 2009 and
continues, and the report on country preparation for this effort was finalized. A statistical
forest information database was also created to strengthen the forest management information
system.
In regard to strengthening the institutional capacities of the ministry and its agencies, selected
staff were trained in data collection and monitoring activities concerning protected areas
under the National Forest and Nature Conservation Project (PNFOCO).4 Additional technical
office staff received training in forest oversight and management, land management, and
biodiversity in the DRC and abroad (in China, Sweden, France, and Spain). Also noteworthy
in connection with the World Bank Forest and Nature Conservation Project (PFCN) is a
project being executed with funding from the German Agency for Technical Cooperation
(GTZ) to provide institutional strengthening for the Congolese Nature Conservation Institute
(ICCN).
In the area of adaptation to climate change, the government developed profiles of projects
supporting recovery of the agricultural and rural sector in the context of its initiative on
"environmental awareness for the agricultural and rural population." The project, an effort to
raise awareness of cultural practices found harmful to biodiversity, is being carried out in the
Bas-Congo and Bandundu provinces.
2.2.3. Mines and hydrocarbons
In the mining subsector, the strategy adopted by the government during implementation of the
GPRSP sought to increase the subsector contribution to economic growth. The government's
growth policy was built upon three pillars, promoting private capital, restoring production,
and improving management.
To promote private capital, the government conducted informational and awareness-raising
activities relating to the Mining Code and regulations and finalized the organizational and
financial audits of the mining rights administrator (Cadastre Minier, CAMI). Workshops were
organized in 2009, and the resultant recommendations are being incorporated into the Mining
Code in connection with the mining promotion project (PROMINES). To support mining
production, the Small-Scale Mining Support Department (SAESSCAM) was strengthened in
in its support and oversight role vis-à-vis small-scale operators, resulting in the deployment of
provincial offices in the East and West Kasai, Katanga, and North and South Kivu.
To strengthen the capacities of sector enterprises, mining companies and related services were
restructured, including (i) the state-owned mining company, GECAMINES, (ii) the Kilo Moto
Gold Mining Office (OKIMO), and (iii) the Expertise, Evaluation, and Certification Center
(CEEC). Additional entities are in the reorganization process. In addition, most of the mining
contracts revisited were renegotiated. Also, in regard to implementing the principles of the
Extractive Industries Transparency Initiative (ITIE), the first report for 2007 was produced in
2009 and is pending validation by an independent consultant.
4
The PNFOCO budget of US$64 million is financed by the World Bank.
34
Nevertheless, the sector continues to face major challenges: (i) lack of funds to finalize the
deployment of SAESSCAN and CAMI, (ii) encouraging and promoting microcredit for
artisanal operators and continuing informational activities in connection with the Mining
Code, (iii) infrequent payment of agreed bonuses to ministry agencies, and (iv) lack of
transparency on the part of certain companies in reporting revenues and payments to the
government.
In the hydrocarbon subsector, the government intends to leverage petroleum and gas reserves
to make the DRC one of the largest African producers. This effort will rely on: (i) reducing
the risk of gas production, (ii) reducing the energy deficit in the eastern sub-region, and (iii)
drafting the petroleum code.
In connection with reducing gas production risks, the government implemented an
experimental, artificial lake degassing mechanism at the Gulf of Kabuno during 2009,
pending complete degassing of the lake.
To offset the energy deficit in the eastern sub-region, the government signed a memorandum
of understanding with private partners to produce methane gas. A joint Congolese-Rwandan
entity was created to exploit the gas and produce electricity in North and South Kivu. The
government also prepared a proposed hydrocarbon code and presented it to the Parliament in
2009 for adoption.
2.2.4. Energy
The initiatives in this sector primarily concerned the production and distribution of electricity.
The government's aim is to increase access to reliable energy for all communities in all
segments of society to increase coverage from 6 percent to 12.5 percent by 2015, in line with
the MDGs, 60 percent by 2025, and ultimately to the entire national territory.
To this end, the government's actions focused on (i) improving the sector institutional and
regulatory framework, (ii) investments to improve reliability, (iii) rehabilitation of existing
infrastructures, (iv) development of new infrastructures, and (v) construction of distribution
networks associated with the production centers.
The African Development Bank has arranged US$15 million in financing to conduct
reliability studies for development of the Inga site and related interconnections. A new
electricity code was validated by stakeholders in 2009. An Energy Information System (SIE)
was created to publish up to date information on the DRC's energy situation by June 2010.
Also, in connection with the PMEDE and SAPMP projects,5 the government undertook a
large-scale investment program enabling it to implement and complete the following actions
in 2009: (i) rehabilitation of the Inga plant, including Group 3, (ii) acquiring a Francis turbine
runner for Inga 2B, (iii) completing a rehabilitation study for the Zongo plant, and (iv)
installing a 500 KVA floating hydropower plant at Kananga.
5
The Domestic Electricity Markets for Consumption and Export Project (PMEDE) and the Southern Africa
Power Market Project (SAPMP) are jointly financed for US$900 million by the World Bank, the European
Investment Bank, and the African Development Bank.
35
2.2.5. Transportation infrastructure
With support from the development partners,6 22,900.60 kilometers of roads were completed
of a planned 20,352.05, representing 113 percent of the objective. The principal actions
related to modernization, rehabilitation, re-opening of unpaved and rural roads, and large-
scale infrastructure maintenance.
Box 5. Selected highway infrastructure actions
A number of roads were rehabilitated during the last 12 months or are in the process of construction. These
include the Kenge-Kikwit, Lubumbashi-Kasumbalesa, Beni-Kisangani, and Mbandaka-Bikoro segments.
Rehabilitation work was also begun on the Bukavu-Kavumu, Kamituga-Kasongo, Kisangani-Banalia-Buta-
Bunduki and Lisala-Bumba-Bunduki segments and is well under way at this time. Work is beginning on the
Ilebo-Kananga, Kikwit-Tshikapa-Kananga-MbujiMayi-Kabinda-Kasongo, Uvira-Fizi-Kalemie-Pweto-
Kasomeno, Beni-Lubero-Rutshuru-Goma, and Niania-Isiro roads. Travel times and costs of road transportation
have declined significantly. Also, to complement the rehabilitation efforts on agricultural feeder roads, 20 ferries
were built or rehabilitated and deployed in Bandundu, Equateur, and East and West Kasai.
In the railroad sector, repairs were completed on a number of arteries in the city and province
of Kinshasa. Additional projects under way aim to rehabilitate 300 kilometers of railroad
track in the capital. The National Highway Maintenance Fund (FONER) also began
operations.
In regard to airport infrastructures, work began on the runway and main pavilion of the N'djili
Airport.
The following table summarizes achievements in the highway sector.
Table 1. Summary of highway sector outcomes
Planned Completed
Description %
(in Km) (in Km)
General-purpose roads 10,793.6 5,000 46
- Paid from own funds 438 158 36
- Paid with external funds * 10,355.6 4,842 47
Urban railways 158.45 83.9 53
- Paid from own funds 107.25 58 54
- Paid with external funds* 51.20 25.9 51
Rural roads 9,400 17,817 190
- Paid from own funds - - -
- Paid with external funds 9,400 17,817 190
TOTAL 20,352.05 22,900.9 113
Source: Calculations based on information obtained from the Agricultural Feeder Roads Department
(DVDA), the Highway Authority (ODR), the Road Network and Drainage Authority (OVD), and
the Large-Scale Works Agency (AGT).
* includes the Sino-Congolese program.
Box 6. Social and economic impacts of highway infrastructure works
Since the completion of rehabilitation work on State Route 4 (RN4) between Kisangani and Beni (in north Kivu), the
resumption highway traffic has eclipsed the airplanes which until then had transported most goods in this part of the
area, located in the eastern part of the Democratic Republic of Congo (DRC). In the center of Butembo, mattresses
6
The main partners involved in this sector are the African Development Bank, through PARSAR; the Kingdom
of Belgium; and the World Bank, through PMURR.
36
wrapped in plastic, baskets full of onions, garlic, and assorted commodities are strewn along the stadium avenue. Amid
the chaos, warehouse workers load sacks of beans onto heavy vehicles, each labeled "Kisangani Express."
"There is always a vehicle to be loaded. That's how we earn a living here," said Bamimbi Vumi, a loader, straining to
catch his breath. A makeshift parking lot was set up in late 2008, just beside the branch office of the largest ground
transport company that transports passengers and goods between Butembo and Kisangani. Just months ago, only a few
passengers would jostle one another to board vehicles and travel the 900 km that separates the two cities.
Air carriers losing market share
Before the road was rehabilitated, most passengers and goods travelled by air. Air carriers ruled. But demand for air
transport has been in freefall since the completion of the road, for which the World Bank provided US$55 million in
financing through the Emergency Economic and Social Reunification Support Project (PUSPRES). A visit to the
empty hangars of the few airline companies that still resist the arrival of vehicles reveals the effects of the competition.
"Vehicle operators in Kisangani are really killing our business," complained Dominique Mbavumoja, branch manager
for Mango Airlines, a local operator. "We are on the verge of folding, but are thinking up strategies to retain our
clients."
Of the 13 airline companies operating between 2000 and 2005, only three are still trying to stay afloat. "What do you
expect? Clients see where their interests lie. And besides, our government banned Antonov flights some time ago,"
said Pascal Karungu, vice-president of the Drivers' Association of Congo (ACCO). In his view, air transport
"benefited foreign pilots more than anyone, but now it's our drivers who are profiting." "We used to charge US$1.4
per kilo, but the truck drivers came along and lowered the price to US$0.5 per kilo. Some even go as low as US$0.25,"
said Muyisa Kambine, head of marketing for Galaxie Kavatsi airline. "Before the truckers came along, we handled
between 150 and 200 tons of goods per month through Kisangani. Now it's around 29 metric tons," said Dominique
Mbafumoya, bitterly.
Source: World Bank document.
2.2.6. Industry
The government's objective is to make the industrial sector competitive, create jobs, and fully
integrate the sector in regional and international trade.
To date, the Ministry of Industry has issued the first draft of the Industrial Policy and Strategy
Document (DPSI), which is pending adoption and implementation, and prepared action plans
for agro-industry and construction materials, the priority segments.
In regard to management and oversight of legal standards of measurement in the DRC, 217
standards were adopted in agrifood (134 standards), units of measurement (13 standards),
common cements (11 standards), wood (13 standards), steel (54 standards), and compliance
assessment (one standard). A preliminary proposed law on standards of measurement was
validated by an inter-ministerial commission and is pending adoption by the Council of
Ministers. The government began construction of the Orientale Province cement plant,
completed a study on pilot agrifood plants in Kalemie, North Kivu and Bas-Congo, and
established a representational office for the Bas-Congo - Kinshasa development corridor. It
also presented and defended before Parliament a proposed law to preserve national industry;
promulgation of the law, establishment of the regulatory authority, and the choice of N'sele as
the initial site for the proposed Special Economic Zones.
2.2.7. Trade
The government contracted a trade integration assessment with support from the World Bank
in order to compile the information on which to base its trade policy and global strategy to
support trade. The preliminary conclusions of the study were made public at a conference in
February 2010.
37
2.3. Improved access to basic social services and reduced vulnerability
2.3.1. Education
The government's policy for this sector is to develop an inclusive, effective educational
system to promote economic growth, combat poverty, and promote peace and active,
democratic citizenship. The government's objective was to raise the primary school
enrollment rate from 64.1 percent to 80 percent during 2006-2008. This policy was
implemented by strengthening leadership in the educational system, expanding access, and
improving equity and quality at all educational levels.
A strategic framework for tuition-free primary, secondary, and professional education was
developed, and the primary, secondary, and professional education strategy was adopted.
Under the social component of the PMURR, financed by the World Bank, 140 schools were
rehabilitated. As part of the Emergency Social Action Project (PASU) funded by the Social
Fund of the Democratic Republic of the Congo (FSRDC) and TFPs, the government issued
educational kits to primary school teachers and students and provided teacher guides to
supplement reading and mathematics textbooks during 2006-2009. Also, with financing from
the World Bank and the Belgian Technical Cooperation (BTC), textbooks were provided for
primary school students.
As a result of these actions, the gross primary school enrollment rate increased from 64.1
percent in 2006 to 84.3 percent in 2008, compared to 80 percent projected in 2005. However,
enormous challenges remain in regard to meeting the constitutional standard of universal,
tuition-free primary education and achieving the MDGs.
2.3.2. Health
The government's policy in this sector is to provide access to quality healthcare for all
citizens, particularly vulnerable groups, and combat major epidemics and communicable
diseases. The expected outcome of this objective is a reduction in the infant mortality rate
from 126 per 1,000 live births in 2001 to 89 in 2008, and reduction of the maternal mortality
rate from 1,289 to 944 per 100,000 births over the same period.
To achieve these outcomes, the government took the following actions:7 (i) adopted
transitional measures to support the decentralization process, (ii) prepared health sector
facility inventories, a demographic and health survey (EDS), and a survey of the capacity of
training establishments nationwide to generate data for the national policy review, rolled out
the National Health Development Program (PNDS), and updated the Health System
Strengthening Strategy (SRSS) and national health map (carte sanitaire), (iii) in connection
with reform of the public administration, conducted an institutional audit with support from
the WHO, and (iv) revised and disseminated health standards and directives.
7
These actions were carried out with technical and/or financial support from the following development
partners: the World Bank Health Sector Reform Project (PARSS), the World Health Organization (WHO), the
Japan International Cooperation Agency, the United Nations Children's Fund, the United Nations Population
Fund, the Global Fund, the United States Agency for International Development (USAID) AXxes project, the
9th European Development Fund Health Program (PS9FED), GAVI, the GTZ, and the Belgian Intermediate and
Central Health System Support (ASNIC) and Intermediate and Peripheral Health System Support (ASNIP)
projects.
38
In addition to regulatory actions, several initiatives targeted illnesses and disease: (i) the polio
vaccination campaign and distribution of vitamin A and mebendazole to improve child health;
(ii) a campaign to distribute insecticide-treated mosquito nets; and (iii) the vaccination of 2
million infants under age one with financial support from GAVI and UNICEF.
In December 2009, the government began construction work on a large 500-bed hospital in
Kinshasa.
Several additional actions produced the following outcomes: (i) the under-five mortality rate
declined over the reporting period from 172 to 165 per thousand, and thereafter to 148 per
thousand; (ii) the neonatal mortality rate stabilized at roughly 38 per thousand; and (iii) the
BCG vaccination coverage rate increased from 53 to 72 percent, DTP3 from 30 to 45 percent,
Polio 3 from 42 to 46 percent, and the proportion of children who have completed the
recommended vaccines increased from 23 to 31 percent.
2.3.3. Water and sanitation
The government's objective is to increase drinking water coverage from 22 percent in 2005 to
26.9 percent in 2008, with the aim of reaching 40 percent by 2015. The efforts to reach this
objective will include: (i) strengthening and developing drinking water supply systems and
restoring the capacities of the Water Distribution Authority (REGIDESO); (ii) rehabilitating
existing infrastructures; (iii) drilling wells and collecting water from rural sources; (iv)
improving management of water supply facilities; and (v) rehabilitating sewage lines in large
cities.
The following actions8 were taken in regard to urban and rural drinking water supplies: (i)
delivery of drinking water to several neighborhoods bordering East Kinshasa; (ii) construction
of 19 wells, 14 in Kabalo and five in neighborhoods outside East Kinshasa; (iii) rehabilitation
of a water collection facility at the Lukaya water treatment plant; (iv) rehabilitation of N'djili
water collection facilities; (v) construction of a second module at the Boma collection plant
and rehabilitation of the Kinshasa training center, maintenance shop, and central lab; and (vi)
rehabilitation of secondary and tertiary networks in 10 communes of Kinshasa. Out of 32
projects identified, seven were completed for a cost evaluated at US$423 million compared to
US$428 million, representing a financial execution rate of 99 percent.
The government actions served to increase access to drinking water to a rate currently
estimated at 27 percent.
However, a number of difficulties were encountered in implementing actions in this sector:
- lack of a water and sanitation sector development strategy;
- weak progress in legal and institutional sector reforms;
- nonalignment of several actions planned in the government budget;
- insufficient financial resources to make use of investments (government counterpart
for implementation of projects financed by external partners);
8
The following partners provided support in the water and sanitation sector: the World Bank, the African
Development Bank, the European Union, UNICEF, the German Development Cooperation (KFW Development
Bank), and Belgian Development Cooperation / Belgian Export Financing (FINEXPO), in connection with the
Emergency Urban and Social Rehabilitation Project (PURUS), the Urban Water Supply Project (PEMU), the
Multi-Sector Socioeconomic Infrastructure Rehabilitation Project (PMURIS), the Peri-Urban Water Supply and
Sanitation Project (PEASU), PMURR, and others.
39
- weak alignment of external financing with government priorities; and
- weak technical and financial capacities of local enterprises to carry out works.
2.3.4. Social protection
The government's objective in this sector is to improve living conditions for vulnerable
groups, women and children in difficulty, persons living with handicaps, the elderly, and
displaced persons and/or refugees. To achieve its objectives, the government conducted
informational and awareness campaigns regarding the social protection strategy, community
development, and creation of wealth adapted to the situation of target groups.
The principal actions implemented were: (i) adoption and publication of the child protection
law; (ii) provincial consultations and development of a document on child protection in case
of divorce or family separation; (iii) the removal of 12,000 children working in mines; (iv)
reintegration of 570 youths affected by the war; (v) the adoption of policies and a national
action plan on orphans and vulnerable children; (vi) a census of street children in Kinshasa,
estimated to number 14,000; and (vii) the development of training modules for social workers
and capacity-strengthening activities for 130 social workers in four provinces (Kinshasa, East
Kasai, Katanga, and Bandundu).
2.4. The fight against HIV/AIDS (one of the GPRS pillars)
The government's policy is to: (i) prevent the transmission of HIV; (ii) improve the quality of
life for persons living with HIV; (iii) mitigate the impact of AIDS on the community; and (iv)
strengthen coordination, monitoring, and evaluation at all levels.
The actions taken to achieve these results concerned preventing and treating HIV/AIDS,
attenuating the socioeconomic impact of HIV/AIDS, and strengthening coordination and
monitoring-evaluation actions in the fight against HIV/AIDS.
2.4.1. Preventing and stabilizing HIV and STI transmission
This component was central to the government's efforts. Awareness and mobilization
campaigns were conducted to encourage communities to change behaviors relating to
vulnerability factors. These included informal educational talks and activities to promote STI
services, voluntary counseling and screening, and the use of condoms by specific vulnerable
populations (sex workers, persons living with HIV, men in uniform, transport workers,
miners, truck farmers, etc.).
Fifty million condoms were distributed per year in recent years, and 220 million were ordered
in 2009. The rate of use remains low, however, and the estimated rate of use among teenagers
is estimated at 21 percent. A number of initiatives targeting the young were also conducted,
including efforts to delay the start of sexual activity, promote monogamous relationships, and
promote proper use of condoms. In addition, approximately 4,098,750 individuals received
comprehensive services between 2007 and 2009, including test results, voluntary counseling
and screening to raise awareness of individual vulnerability, and early treatment of persons
living with HIV.
During the same period, 642,096 out of 1,674,330 IST cases were treated in accordance with
national directives, representing 38 percent coverage of requirements (National Multi-Sector
40
Program against HIV/AIDS (PNMLS) annual reports, 2007-2009) as illustrated in the graph
below.
As the following graph shows, there was a slight change in terms of coverage, although the
gap persists. In total, from 2007 to 2009, 98.7 percent of pregnant women did not receive
prophylactic antiretroviral (ARV) therapy to prevent mother-to-child transmission.
The proportion of infants born to HIV-positive mothers who were also infected by HIV was
25 percent (National Multi-Sector Program against HIV/AIDS (PNMLS), United Nations
General Assembly Special Session on HIV/AIDS (UNGASS), 2007).
Figure 6. Preventing mother-to-child transmission: 2007­2009 coverage
[Key:]
Y axis: thousands
Blue: HIV-positive pregnant women
Red: [Treatments]
In addition, to reduce the risk of HIV transmission, the government distributed post-exposure
prophylactic kits to female victims of sexual violence, and continued regular programming
and distribution of condoms to vulnerable groups. In 2008, over 18,407 incidents of sexual
violence were recorded in the DRC, and only 2,254, or 14 percent, had access to post-
exposure kits,9 revealing an 86 percent gap in terms of victims of sexual violence with access
to post-exposure kits to prevent HIV. Also, several million condoms were distributed
throughout the DRC.
In regard to safety of transfusions, the government's intent remains to expand coverage to
populations in need while ensuring the quality of transfused blood. In regard to the figure
below, only 686,379 blood transfusions of the stated need (1,136,000) occurred in three years,
representing 60.42 percent coverage. When quality screening aspects are taken into account,
including compliance with the national protocol, training of transfusion service providers, and
quality control, the 2007 UNGASS report indicates that only 46.8 percent of transfused blood
units underwent quality screening.
9
United Nations Population Fund (UNFPA), 2008 annual report.
41
2.4.2. Speeding treatment and improving the quality of life of persons living with
HIV/AIDS
In order to improve the quality of life of persons living with HIV, the government provided
ARV treatment to eligible persons living with HIV as well as treatment for opportunistic
infections (OI). In 2009, 34,947 patients from Kinshasa (11,701), Kisangani (4,751), and
Katanga (3,041) received ARV treatment, compared to only 15,561 persons treated in 2006.
Until 2008, treatment of OIs was provided in only 33.6 percent of health zones, representing a
coverage gap of 64.4 percent. To date, 15 percent of health zones, or 80 out of a total of 515,
provide care for HIV-tuberculosis co-infection. Out of 100,000 cases detected each year, 97
percent did not have access to HIV screening, and over 60 percent of those infected did not
receive ARV therapy. In 2009, 56,563 new OI cases were recorded. Tuberculosis, with 5,161
cases (PNMLS annual report, 2009), is the most widespread opportunistic infection. The
estimated percentage of persons with HIV/TB co-infection who received both TB and [HIV]
therapy was 0.1 percent (PNMLS, UNGASS Report 2007).
2.4.3. Mitigating the socioeconomic impact of HIV/AIDS on the community
To prepare a strategy to support orphans and vulnerable children (OVCs) data collection
workshops were organized in connection with the Rapid Country Assessment, Analysis, and
Action Planning Initiative on Behalf of Orphans and other Vulnerable Children in Sub-Sahara
Africa (RAAAP). As a result, 135,708 OVCs identified were enrolled in school, 53,418
received nutritional assistance, and 87,124 received legal assistance. Also, in the public
sector, the HIV/AIDS offices 17 ministries and the national assembly prepared and
implemented national and provincial operational plans to combat HIV/AIDS.
In the private sector, the following services were offered: (i) treatment of STIs; (ii)
distribution of condoms; and (iii) ARV treatment. Regarding educational efforts, HIV
education was included in the primary school curriculum.
Also, to strengthen the legal framework for persons living with HIV, a law on protection of
persons living with HIV and other affected persons was published on July 14, 2008. The law
requires the government to make available medicines for the treatment of AIDS and HIV
screening tests free of charge, and expands the government's responsibilities in combating
expansion of the pandemic through a more coherent policy for treatment of affected persons
and sanctions for discrimination against them.
2.4.4. Building coordination, monitoring and evaluation capacities at all levels
In 2009, the National Multi-Sector Commission to Combat AIDS (CNMLS) adopted the
2010-2014 National Strategy to Combat AIDS. In order to speed implementation of the
strategy, two sector plans to combat AIDS were developed for the health and education
sector.
2.5. Support for local initiatives
In connection with the PASU program, the government rehabilitated public infrastructures in
selected communities using the high labor intensive (HLI) approach, and strengthened social
security. In the same context, selected communities in 11 provinces received micro-grants,
42
information, education, and communication campaigns, training sessions, and technical
advisory services for project monitoring and evaluation.
2.6. Strengthening capacities
No integrated capacity-strengthening programs were carried out during the GPRS
implementation period. To remedy this situation, the National Capacity Strengthening
Secretariat (SENAREC) was directed to implement a National Capacity Strengthening
Program (PRONAREC). The program is to be included in the 2011-2015 Five-Year
Development Plan.
Chapter 3. MONITORING AND EVALUATION
The GPRS provides for an institutional mechanism to coordinate implementation and tools to
provide monitoring and evaluation.
3.1. Institutional framework
The institutional coordinating structure for the GPRS includes the Inter-Ministerial
Commission on the National Poverty Reduction Strategy (CI-SNLCP) and its technical arm,
the National Poverty Reduction Strategy Coordinating Unit (UPPE-SRP); and the Inter-
Ministerial Monitoring Commission for Financial Institution Programs (CISPI) and its
Technical Monitoring Committee (CTR). In addition to these bodies are institutions such as
the INS, the Congolese Poverty and Inequality Observatory (OCPI) and the Aid and
Investment Management Platform (PGAI).
Thematic groups were instituted in 2008 to serve as framework for consultations between the
government, the TFPs, and civil society organizations in implementing the actions provided in
the GPRS.
In the provinces, implementation of the GPRS was coordinated by the provincial executive,
with technical support from provincial and local committees and cooperation from the TFPs.
All of the coordination structures supporting GPRS implementation were placed under the
authority of the prime minister. The strategic coordination proved less than satisfactory at the
central and provincial levels. However, the implementation, monitoring, and evaluation
activities of sector structures performed well with support from the TFPs. In mid-2009, the
government promoted corrective action by instituting weekly meetings to monitor progress on
HIPC Initiative completion point triggers.
3.2. Monitoring and evaluation tools
For the purpose of monitoring and evaluating the GPRS, appropriate indicators were defined
in the sectors identified as priorities under the first-generation GPRSP. These were the
education, health (including HIV/AIDS), agriculture, rural development, transportation
infrastructure, and water and sanitation sectors.
The indicators were derived from the 1-2-3 surveys (2004-2005), the Multiple Indicator
Cluster Survey II (MICS 2) (2001), and participatory consultations (2004-2005). No other
43
major surveys have been conducted since 2006 other than the Demographic and Health
Surveys (EDS) to measure comparative progress in regard to the MDGs.
With respect to macroeconomic performance, the indicators were established in the context of
the IMF staff monitoring program and the program currently being supported by the Poverty
Reduction and Growth Facility (PRGF). Other indicators were defined as projects or sector
programs were being designed.
It should be noted that weaknesses in the Congolese statistical apparatus precluded the
monitoring of most indicators during execution of the GPRS, which would have enabled the
necessary adjustments to be made during implementation of the GPRS.
However, midterm reviews of portfolio performance conducted, inter alia, by the World
Bank, the African Development Bank Group, agencies of the United Nations and European
Union, and several bilateral partners provided the DRC with indications on progress in the
sectors benefiting from their interventions.
44
CONCLUSION
Closing remarks
The Congolese government is pleased to have initiated an effort, with the support of its
technical and financial partners, to systematize its medium-term development planning, and to
have resolutely done so in a very hostile internal and external context. The results achieved
are less important than the ultimate adherence to an approach that represents a clear break
with ad hoc practices that marked years of poor governance.
Having reviewed the implementation of the GPRS, the government believes it has done so
satisfactorily and has therefore accomplished Trigger No. 1 of the Completion Point under the
HIPC Initiative. The first-generation GPRSP would have produced more successful results
were it not for the constraints faced over the entire implementation period, chief among which
were:
- Limited internal resources to finance the GPRS, due to government revenue remaining
low despite a relatively high rate of growth. This situation was exacerbated by a
contraction of budgetary support following suspension of the program supported by the
PRGF, which slowed the pace of reforms;
- De-linking of the priority action plan (PAP), a key tool in implementing the GPRS,
from the national budget, preventing it from being executed through the expenditure
cycle. This situation is the result of lack of cohesion between the Budget Preparation
and Monitoring Department, the Planning Department, and the sector ministries;
- Lack of communication between the government and the Bretton Woods institutions,
which initiated the planning approach through the GPRSP, in regard to a tool being
attempted for the first time in a country emerging from conflict. This situation did not
advance the purpose of developing an understanding of the approach and adapting it;
- Burdensome administrative procedures imposed on project execution by both TFPs and
the government, impacting project cost evaluations in most cases;
- Social and political uncertainties created by the tensions of the 2006 elections,
exacerbated by the climate of insecurity in the eastern part of the country, and their
repercussions for public financial management and macroeconomic stability;
- The international food and financial crises followed by the collapse of commodities
prices, which had devastating effects on economic activity and the management of
public finances and currency.
Despite the constraints identified above, implementation of the GPRS produced encouraging
results, as summarized below:
- Social sector indicators (health, HIV/AIDS, education, water and sanitation)
improved. The greatest gains were made in the education sector, where the various
indicators are on par with those of sub-Saharan African countries.
45
- The macroeconomic programs implemented during the period under review restored
macroeconomic stability, as demonstrated by the conclusion of the IMF program
known as PEG II, supported by the PRGF, in December 2009. However, the modest
performance observed in regard to budgetary and monetary policies could have been
strengthened if the reform program had not slowed, in which case the macroeconomic
policies would have made a significant contribution toward reducing poverty.
- The emergency sector programs, projects, and actions in the areas of planning,
security, transportation infrastructure, health, education, and water have restored peace
and security and improved socioeconomic conditions, albeit slightly, for the
Congolese people. They had a genuine impact on poverty reduction, primarily in terms
of improved economic and social infrastructures and access to basic social services.
The results described represent the execution of only half of the actions planned.
- The government recognizes that the strategic coordination of the GPRS was not
commensurate with the importance of the issues at stake. It notes, however, that the
weekly meetings instituted in the second half of 2009 to monitor progress on the HIPC
Initiative completion point triggers signal a new direction in adapting government
programs. In this regard, the government expects to intensify and rationalize its efforts
in the context of the second-generation GPRSP.
Recommendations
The recommendations draw on the lessons learned from implementation of the first-
generation GPRSP. They shed light on the options that could emerge from the participatory
consultations on the second-generation GPRSP. Certain GPRSP pillars, noted below form the
basis of tomorrow's challenges:
1. Consolidating peace and security, through continued actions to complete the
pacification of national territory and end the humanitarian crisis, and by accelerating
reform of the security sector;
2. Expanding the government's capacity to deliver quality social services by creating
consensus as to the government's role and the need to better focus that role on its
sovereign missions, and adapt the central and provincial administrations accordingly;
3. Promoting administrative and economic governance by continuing the decentralization
process, adjusting it to our means; through a relationship of accountability between
government and the governed; through continued financial reforms and reforms of
public enterprises; and through a genuine commitment to transparent mechanisms in
managing natural resources (EITI++);
4. Strengthening the conditions for sustainable growth, through an improved business
climate and implementation of a roadmap to raise the country's standing in the "Doing
Business" category; intensified support for sectors with growth potential and the road,
energy, and transportation infrastructures; and implementation of an aggressive
commercial policy;
46
5. Giving serious consideration to the effects of climate change and issues pertaining to
nature conservation; and
6. Mobilizing the private sector (including through public-private partnerships) to
address the problems of financing development programs.
In reference to the important task of monitoring and evaluation, the government will face six
major challenges: (i) reviewing and formalizing the monitoring-evaluation framework; (ii)
securing the production of statistical data; (iii) renewing the operational and budgetary
programming framework; (iv) implementing reporting tools: (v) developing a minimal
framework for evaluating public policies; and (vi) increasing participation and
communication.
47
ANNEXES
1. Summary budget by function, 2008-09
2. Summary budget by category of expenditure, 2008-09
3. Summary budget by GPRSP pillar, 2008-09
4. Tables on macroeconomic framework
5. Millennium Development Goal Indicators
6. Priority actions: 2009 outcomes and 2010 programming
48
Table 1.1. Democratic Republic of the Congo - Summary budget by function, 2008-09
(CDF billions)
2008 2009
Actual Budget Actual Execution
rate
Grand total primary expenditure 1,514,680 2,552,880 1,701,365 66.6
Central public administration (excluding public debt) 624,754 904,352 682,060 75.4
Defense 141,016 156,168 224,585 143.8
Order and public security 125,276 120,812 107,375 88.9
Economic affairs 254,098 763,497 288,521 37.8
Protection of environment, flora and fauna 8,091 50,728 7,824 15.4
Social protection, social affairs 26,162 38,748 22,990 59.3
Lodging and utilities 41,975 57,417 35,082 61.1
Health 69,635 161,580 99,517 61.6
Religions, culture, sports and recreation 16,910 15,170 22,208 146.4
Education 206,765 284,409 211,205 74.3
(Percentage of GDP)
Grand total primary expenditure 23.2 32.9 19.5 ...
Central public administration (excluding public debt) 9.6 11.7 7.8 ...
Defense 2.2 2.0 2.6 ...
Order and public security 1.9 1.6 1.2 ...
Economic affairs 3.9 9.8 3.3 ...
Protection of environment, flora and fauna 0.1 0.7 0.1 ...
Social protection, social affairs 0.4 0.5 0.3 ...
Lodging and utilities
0.6 0.7 0.4 ...i)
Health 1.1 2.1 1.1 ...
Religions, culture, sports and recreation 0.3 0.2 0.3 ...
Education 3.2 3.7 2.4 ...
(Percentage of total primary expenditure, unless otherwise indicated
Grand total primary expenditure 100.0 100.0 100.0 ...
Central public administration (excluding public debt) 41.2 35.4 40.1 ...
Defense 9.3 6.1 13.2 ...
Order and public security 8.3 4.7 6.3 ...
Economic affairs 16.8 29.9 17.0 ...
Protection of environment, flora and fauna 0.5 2.0 0.5 ...
Social protection, social affairs 1.7 1.5 1.4 ...
Lodging and utilities 2.8 2.2 2.1 ...
Health 4.6 6.3 5.8 ...
Religions, culture, sports and recreation 1.1 0.6 1.3 ...
Education 13.7 11.1 12.4 ...
For reference:
Nominal GDP (CDF billions) 6,525,983 7,760,000 8,729,320 ...
Total expenditure 1,635,292 2,922,394 1,846,675
Public debt (CDF billions) 120,612 369,513 145,310 ...
Source: Budget monitoring reports, printed April 7, 2010
49
Table 1.2. DRC. Summary budget by category of expenditure, 2008-09
(CDF billions)
2008 2009
Actual Budget Actual Execution
rate
Grand total primary expenditure 1,515,072 2,552,888 1,701365 67
Operations 1,208,303 1,589,538 1,325330 83
Personnel 533,641 590,116 559789 95
Excluding personnel 674,662 999,422 765541 77
Goods and materials 100,620 44,020 65724 149
Service expenditures 153,897 58,677 137715 235
Government transfers and interventions 420,145 896,725 562103 63
Investment 306,769 963,350 376035 39
(Percentage of GDP)
Grand total primary expenditure 23.2 32.9 19.5 ...
Operations 18.5 20.5 15.2 ...
Personnel 8.2 7.6 6.4 ...
Excluding personnel 10.3 12.9 8.8 ...
Goods and materials 1.5 0.6 0.8 ...
Service expenditures 2.4 0.8 1.6 ...
Government transfers and interventions 6.4 11.6 6.4 ...
Investment 4.7 12.4 4.3 ...
(Percentage of total primary expenditure)
Operations 79.8 62.3 77.9
Personnel 35.2 23.1 32.9 ...
Excluding personnel 44.5 39.1 45.0
Goods and materials 6.6 1.7 3.9 ...
Service expenditures _ 2.3 8.1 ...
10.2
Government transfers and interventions 27.7 35.1 33.0 ...
Investment 20 39 22
For reference:
Total expenditure 1,635,292 2,922,394 1,846675 63
Public debt, principal 120,612 369,513 145310 39
Nominal GDP (CDF billions) 6,525,983 7,760,000 8,729320 ...
Source: Budget monitoring reports, printed April 7, 2010
50
Table 1.3. DRC. Summary budget by GPRSP pillar, 2008-09
(CDF billions)
2008 2009
Execution
Actual Budget Actual
rate
Grand total primary expenditure 1,514,680 2,552,880 1,701,365 66.6
Good governance and peace (excluding public debt) 891,563 1,157,332 1,018,361 88.0
Political and administrative governance 359,279 728,150 338,952 46.5
Security governance 260,353 247,103 330,400 133.7
Economic governance (excluding public debt) 271,932 182,079 349,009 191.7
Support for sectors with economic growth potential 245,859 752,213 281,059 37.4
Agriculture, forestry, hunting and fishing 31,216 48,189 59,331 123.1
Buildings and public works 18,783 21,841 8,206 37.6
Electricity 37,800 34,670 7,892 22.8
Hydrocarbons 26,993 10,975 10,514 95.8
Extractive industries 17,396 9,275 5,830 62.9
Manufacturing industries 1,202 6,726 3,483 51.8
Goods and services 1,591 3,534 2,293 64.9
Telecommunications 9,488 14,226 9,256 65.1
Transportation 101,389 602,776 174,254 28.9
Access to basic social services 377,258 643,335 401,944 62.5
Education 206,765 284,499 211,205 74.2
Health 69,635 161,580 99,517 61.6
Social protection 33,883 73,942 26,109 35.3
Environment 8,091 50,728 7,824 15.4
Water 34,124 42,382 17,054 40.2
Electricity 13 3,000 11,243 374.8
Urban poverty and habitat 7,839 12,035 6,785 56.4
Culture, science, and universal access to technology 16,910 15,170 22,208 146.4
(Percentage of GDP)
Grand total primary expenditure 23.2 32.9 19.5 59.2
Good governance and peace (excluding public debt) 13.7 14.9 11.7 ...
Political and administrative governance 5.5 9.4 3.9 ...
Security governance 4.0 3.2 3.8 ...
Economic governance (excluding public debt) 4.2 2.3 4.0 ...
Support sectors with economic growth potential 3.8 9.7 3.2 ...
Agriculture, forestry, hunting and fishing 0.5 0.6 0.7 ...
Buildings and public works 0.3 0.3 0.1 ...
Electricity 0.6 0.4 0.1 ...
Hydrocarbons 0.4 0.1 0.1 ...
Extractive industries 0.3 0.1 0.1 ...
Manufacturing industries 0.0 0.1 0.0 ...
Goods and services 0.0 0.0 0.0 ...
Telecommunications 0.1 0.2 0.1 ...
Transportation 1.6 7.8 2.0 ...
Access to basic social services 5.8 8.3 4.6 ...
Education 3.2 3.7 2.4 ...
Health 1.1 2.1 1.1 ...
Social protection 0.5 1.0 0.3 ...
Environment 0.1 0.7 0.1 ...
Water 0.5 0.5 0.2 ...
Electricity 0.0 0.0 0.1 ...
Urban poverty and habitat 0.1 0.2 0.1 ...
Culture, science, and universal access to technology 0.3 0.2 0.3 ...
(Percentage of total expenditure for pillar concerned, unless otherwise indicated)
Good governance and peace (excluding public debt) 100.0 100.0 100.0 ...
51
Political and administrative governance 40.3 62.9 33.3 ...
Security governance 29.2 21.4 32.4 ...
Economic governance (excluding public debt) 30.5 15.7 34.3 ...
Support sectors with economic growth potential 100.0 100.0 100.0 ...
Agriculture, forestry, hunting and fishing 12.7 6.4 21.1 ...
Buildings and public works 7.6 2.9 2.9 ...
Electricity 15.4 4.6 2.8 ...
Hydrocarbons 11.0 1.5 3.7 ...
Extractive industries 7.1 1.2 2.1 ...
Manufacturing industries 0.5 0.9 1.2 ...
Goods and services 0.6 0.5 0.8 ...
Telecommunications 3.9 1.9 3.3 ...
Transportation 41.2 80.1 62.0 ...
Access to basic social services 100.0 100.0 100.0 ...
Education 54.8 44.2 52.5 ...
Health 18.5 25.1 24.8 ...
Social protection 9.0 11.5 6.5 ...
Environment 2.1 7.9 1.9 ...
Water 9.0 6.6 4.2 ...
Electricity 0.0 0.5 2.8 ...
Urban poverty and habitat 2.1 1.9 1.7 ...
Culture, science, and universal access to technology 4.5 2.4 5.5 ...
For reference:
Public debt (CDF billions) 120612 369,513 145,310 39.3
Nominal GDP (CDF billions) 6,525983 7,760,000 8,729,320 ...
Source: Budget monitoring reports, printed April 7, 2010
52
Table 1. DRC: GDP at constant prices by sector of activity, 2006-09
2006 2007 2008 2009
Est. Est. Est. Est.
(in constant CDF billions, base 100 = 2000)
Primary sector 204.3 210.5 221.3 226.1
Agriculture, forestry, hunting and fishing 153.2 158.2 162.9 167.8
Extractive industries 51.1 52.4 58.4 58.3
Secondary sector 50.8 53.3 54.9 55.9
Manufacturing industries 16.2 17.0 17.5 17.8
Buildings and public works 31.8 33.5 34.8 35.4
Electricity, water 2.8 2.9 2.7 2.7
Tertiary sector 122.6 136.3 147.6 152.7
Wholesale and retail trade 71.3 80.6 90.5 96.4
Transportation and communications 22.3 24.7 26.8 27.8
Goods and services 23.2 24.8 26.0 26.7
Public services 7.7 8.2 8.5 6.2
Imputed production of bank services -1.8 -2.0 -4.3 -4.4
GDP at factor cost 377.7 400.1 423.8 434.7
Import duties and fees 9.0 10.8 12.4 13.5
GDP at market price 386.7 410.9 436.2 448.2
(Change in percentage from prior year)
Primary sector 2.6 3.1 5.1 2.2
Agriculture, forestry, hunting and fishing 3.2 3.3 3.0 3.0
Extractive industries 0.9 2.5 11.4 -0.2
Secondary sector 8.5 5.1 3.0 1.8
Manufacturing industries 0.9 5.1 2.7 2.1
Buildings and public works 13.2 5.4 3.8 2.0
Electricity, water 4.3 1.8 -4.9 -1.6
Tertiary sector 9.0 11.1 8.3 3.5
Wholesale and retail trade 8.9 13.1 12.3 6.5
Transportation and communications 12.5 10.9 8.4 3.7
Goods and services 7.5 6.9 4.8 2.7
Public services 5.8 6.2 4.2 -26.6
Imputed production of bank services 14.8 13.0 110.3 4.0
GDP at factor cost 5.4 6.0 5.9 2.6
Import duties and fees 14.0 19.0 15.4 8.5
Real GDP 5.6 6.3 6.2 2.8
Source: CPCM
53
Table 2 Democratic Republic of the Congo, Public Sector Financial Operations, 2009 (CDF Millions)
2006 200 2008 2009
Est. Est. Est. Est. Prog
(Percentage of GDP; unless otherwise indicated
Total revenue and grants 18.8 16.3 23.4 27.3 21.3
Total fiscal and non-fiscal revenue 12.8 14.7 18.5 18.0 16.8
excludes Sino-Congolese arrangement 15.7 15.8
Customs and excise (OFIDA) 4.7 5.4 6.5 6.3 6.2
Direct and indirect contributions (DGI) 3.8 5.0 6.6 6.4 6.2
Petroleum (royalties and taxes) 3.2 3.1 3.5 1.4 1.5
Other 1.0 1.2 1.8 3.9 3.0
Sino-Congolese arrangement ... ... 0.0 2.3 1.1
Other 1.6 1.9
Revenue from China Mining project
Total grants 6.0 1.6 4.9 9.4 4.5
Budgetary grants 1.0 0.0 0.0 2.7 1.7
Project grants 4.0 0.6 1.1 4.2 2.0
HIPC debt relief 1.0 0.9 3.8 2.5 0.8
Total expenditure 21.5 18.9 23.0 28.9 25.7
Current expenditure 14.1 15.7 18.1 16.3 15.4
Salaries 5.3 5.8 6.9 6.3 6.0
Interest payable on debt 3.5 3.8 3.4 3.3 3.1
Of which: interest on external debt 3.0 3.2 2.9 2.9 2.7
Of which: interest on domestic debt 0.6 0.5 0.4 0.4
Subsidies and transfers 2.1 2.2 3.5 3.0 2.8
Economic interventions 0.0 0.2 0.2 0.2 0.2
Auxiliary organizations 0.4 0.1 0.1 0.1 0.1
Transfers to provinces 0.8 1.0 1.9 1.6 1.5
Payments to revenue-collecting agencies 0.9 0.9 1.1 1.1 1.0
Goods and services 3.2 3.9 4.3 3.7 3.6
Of which: Institutions 0.5 0.9 1.2 0.9 0.8
Ministries 1.5 2.8 2.5 2.1 2.1
Centralized payment 0.6 0.3 0.5 0.7 0.7
6.4 8.8
Capital expenditures 3.2 2.3 3.7 9.2 7.8
External financing 2.2 1.5 2.1 6.2 5.1
Domestic financing 1.0 0.9 1.6 2.9 2.7
Central government investment 1.0 0.9 1.6 1.6 1.6
Provincial investment 0.0 0.0 0.0 1.3 1.1
Exceptional expenditure 2/ 4.2 0.9 1.2 3.4 2.5
External financing 3.2 0.0 0.1 2.3 1.1
Domestic financing 1.0 0.9 1.1 1.2 1.5
0.0 0.0 0.1 0.0
General balance (commitment basis) -2.8 -2.6 0.4 -1.6 -4.4
Domestic balance (commitment basis) 0.6 1.4 1.6 -0.7 0.3
-0.4 0.5 0.5 -1.9 -1.2
Variation in arrears -0.2 -0.2 -0.2 -0.6 -0.5
Central bank balance -0.5 -0.4 -0.5 -0.9 -0.9
Consolidated general balance -2.9 -3.2 -0.4 -3.0 -5.9
Domestic balance 0.5 0.8 0.9 0.1 -0.1
Total financing 2.9 3.2 0.4 3.0 5.9
Domestic financing 1.1 0.9 0.9 -0.8 0.0
of which: Banking sector 1.2 0.9 1.1 -1.2 -0.7
External financing 1.8 2.9 -0.9 3.3 5.6
Amortization payable before debt relief -3.7 -3.9 -3.8 -4.9 -4.3
Project loans 1.3 1.2 0.8 4.6 4.4
Debt relief 3.5 3.8 0.7 0.3 3.3
Cumulative external arrears 0.7 1.8 1.4 -6.4 2.2
Financing gap 0.1 -0.6 0.5 0.6 0.3
Source: CPCM
54
Table No. 1. Progress toward Millennium Development Goals in the DRC
Value in Value in Value in
Objectives Indicators used in DRC
1990 2001 2007
Incidence of poverty 60.0% 73.0% 71.34%
Proportion of persons living on less than
60.0% 73.0% 71.3%
US$1 per day
1. Reduce extreme
poverty and hunger Human development index 41.1%
Proportion of underweight children 28.0% 34.0% 25.1%
Proportion of population consuming less
31.0% 73.0%
than the minimum caloric intake
Net primary school enrollment rate 56.0% 52.0% 62.0%
2. Universal primary Gross primary school enrollment rate 64.0% 83.4%
education Primary school completion rate 51.0% 25.0% 50.0%
Literacy rate 75.0%
Ratio of girls/boys in elementary school 74.0% 90.0% 78.0%
3. Promote equality of
the sexes and Ratio of girls/boys in secondary school 45.0% 54.0%
empowerment of women
Percent elected by gender (% of women) 6.0% 10.3% 8.4%
148 of
Infant mortality rate 126 of 1,000 98 of 1000
4. Reduce infant 1,000
mortality Proportion of children under age 2
62.9%
vaccinated against measles
Maternal mortality rate 870 1289 549
5. Improve maternal Proportion of attended births 60.7% 74.0%
health
Prenatal care coverage (1995) 56.0% 68.2% 85.3%
4.2% 3.4%
Prevalence of HIV AIDS nd
(2003) (2009)
Use of contraceptives (all methods) 31.4% 21.0%
6. Combat HIV/AIDS, Use of contraceptives (modern method) 15.0% 4.4% 5.7%
malaria, and other
Under-5 malaria mortality rate per 100,000 ... 1000.0%
disease
Number of children orphaned by AIDS nd 7000
Children under 5 protected by insecticide-
0.7% 6.0%
treated mosquito nets
160 of
Incidence of tuberculosis
100,000
7. Ensure environmental Proportion of urban population with access
- 38.0%
sustainability to potable water
55
Proportion of rural population with access
25.7% 28.5% 16.7%
to potable water
Proportion of urban population living in a
- 9.0%
clean environment
Proportion of population with reliable
41.5% 45.7% 22.1%
access to better-quality water
Proportion of population with access to
12.6% 8.8% 10.0%
sanitation services
Proportion of rural population living in a
6.3% 39.4% 11.0%
clean environment
8. Implement a global Completion rate for seven triggers - Low
partnership for Extremely
development Proportion of APD in relation to GDP Very low
low
Source: EDS 2007; MICS 1, 2, 3; 1-2-3 Survey Sector statistics, MDG Report 2004
56
Summary of actions implemented under the 2008-2009 Priority Action Plan
NOT
IN Actions
No. PILLARS COMPLETED COMPLETED (as
PROGRESS planned
of April 2009)
PROMOTING GOOD GOVERNANCE AND
I CONSOLIDATING PEACE THROUGH
INSTITUTIONAL STRENGTHENING
JUDICIAL AND SECURITY GOVERNANCE
Security 0 1 6 7
Justice 12 7 11 30
Police 17 31 40 88
Army 0
Sexual violence 10 1 0 11
POLITICAL AND ADMINISTRATIVE
GOVERNANCE
Public administration 3 2 4 9
Local governance 2 1 6 9
Election 2 0 6 8
ECONOMIC GOVERNANCE 0
Transparency in public financial management 0 0 15 15
Debt management 0 0 10 10
Restructuring of statistical apparatus 0 2 2 4
Reform of public enterprises 4 0 1 5
Business climate 0 0 0 0
Jobs 0 2 23 25
Financial system reform 6 7 4 17
Subtotal (1) 56 54 128 238
II POLICIES SUPPORTING ECONOMIC GROWTH 238
Agriculture and rural development 0 0 0 0
Forest and environment 10 9 6 25
Minds and Hydrocarbons 2 5 11 18
Energy 18 27 14 59
Transportation infrastructure 14 22 17 53
Industry 10 6 26 42
Subtotal (2) 54 69 74 197
ACCESS TO SOCIAL SERVICES AND REDUCING
III
VULNERABILITY
Education 10 4 64 78
Health 51 18 49 118
Water and sanitation 3 4 32 39
Social protection 0 0 0 0
Gender 6 1 1 8
Subtotal (3) 70 27 146 243
IV. Combating HIV/AIDS 17 5 3 25
Subtotal (4) 0
V SUPPORT LOCAL INITIATIVES 1 3 4 8
Subtotal (5) 1 3 4 8
TOTAL (1)+(2)+(3)+(4)+(5) 198 158 355 711
57